9I0G 

.r\3 



The Sugar Bounty. 



CLAIM OF 

THE OXNARD BEFT SUGAR COMPANY, 

OF NEBRASKA, 
FOR PAYMENT THEREOF. 



ARGUMENT OF 



CHARLES F. MANDERSON 



BEFORE THE 



Comptroller of the Treasury. 



AUOUST, lcS95 



OMAHA PRINTING COMPANY 




^eloi 




Rnnk. A^) 



The Sugar Bounty 



CLAIM OF 

THE OXNARD BEET SUGAR COMPANY, 

OF NEBRASKA, 
FOR PAYMENT THEREOF. 



ARGUMENT OF 



CHARLES F. MANDERSON 



BEFORE THE 



GOMPTROLLER OF THE TREASURY. 



AUGUST, 1895. 



.^ 



Argument of Hon. Charles F. Manderson 
before the Comptroller of the Treasury, in rela- 
tion to the payment of the Sugar Bounty author- 
ized by the act of March 2, 1895. 



Treasury Department, Washington, D. C, August 7^ 
1895. 

Mr. Manderson. If your Honor please, I 
approach the consideration of the matter in hearing 
with considerable degree of diffidence and a reluct- 
ance prompted by several causes. The questions 
involved are momentous; the interests that are at 
stake are of great magnitude. They are particularly 
important to the State of which I am a ciiizen. 
Interests there, public and private, of great promise 
and matters of commerical and agricultural business 
of great pith and moment are in jeopardy; and the 
fact that the State of Nebraska in the first instance 
and second that the welfare of this great country 
are largely involved, cause me to feel great regret 
that time has not been afforded to me to make that 
careful preparation which leads to succinct and 
forcible argument. But a very short time ago, called 
by my professional duties, I was in the State of 
Colorado and the Territory of Utah, and there re- 
ceived the urgent request that, representing an 
industry I was glad to represent when in the Con- 
gress of the United States, I should come here to 
present this matter to the Comptroller of the Treasury. 

But I take heart of hope from several causes. My 
associates, some representing constituencies and others 
representing clients, as I know from conversations 
1 



with tliein, have had ample time for preparation, and 
I myself have derived from interviews had with 
them during the day that I have been here most 
important and valuable aid. And I feel further 
encouragement from the fact that this hearing is 
before you, sir, recognizing as I do in you a brother 
lawyer, learned in the profession and with that 
extended experience that prompted you to be called 
to this high position by the Chief Executive. I 
know as well as I know anything that in the delibera- 
tion which you will give to this matter, before com- 
ing to final judgment, there will be everything of 
fairness and that there will be nothing that will be 
derived from prejudice or that will be based upon 
conjecture. Trusting thus implicitly in you, Mr. 
Comptroller, and relying upon the aid which I know 
I shall receive from my learned associates, I take 
heart of hope and do not for a moment despond of 
the final outcome. 

THE QUESTION BEFORE THE COMPTROLLER. 

This matter comes before you, as I have this mo- 
ment ascertained, on a letter from the Auditor of the 
Treasury, dated the 17th of July, and addressed to 
you in your oi^cial capacity. I will take the time 
to read it as much for my own information as for any 
other purpose, as it has just come to my hand. 

"I have the honor, in compliance with section 8 
of the act making appropriations for the legislative, 
executive and judicial expenses of the Government 
for the fiscal year ending June 30, 1895, and for 
other purposes, approved July 31, 1894, to report 
that the claim of the Oxnard Beet Sugar Company, 
of Grand Island, Nebraska, for the bounty on sugar 
manufactured and produced by said company prior 
to August 28, 1894, amounting to $11,782.50, has 



been received fioiii the Coinniissioner of Internal 
Revenue and examined in this office. 

"I have decided to allow the claim and to certify 
the amount for payment out of the appropriation of 
$238,289.08 for bounty on sugar approved March 2, 

1895. 

" The claim is herewith enclosed for your consid- 
eration. I have suspended action in this case pend- 
ing your direction. 

"Respectfully yours, 

"E. P. Baldwin, 

"Auditor." 

Accompanying this communication I find first, on 
form 301, furnished to beet factors by the 'Treasury 
Department, the claim of the Oxnard Beet Sugar 
Company for the production of sugar at Grand 
Island, Nebraska, evidently properly and carefully 
filled out, and receiving not only the transmission, 
but the approval of the collector of internal revenue 
for the district of Nebraska. With it I find also form 
316, furnished by the department, being the return 
of sugar weighed, also carefully prepared and 
transmitted. The matter before us then is the 
account for sugar made between July i, 1894, and 
August 28, 1894, by the Oxnard Beet Sugar Com- 
pany, of Grand Island, Nebraska, and does not arise 
on a warrant drawn in their favor coming to you for 
counter-signature. 

My attention has just been called to a communi- 
cation, which I have not had the opportunity to 
read, dated the second day of August, addressed to 
the Comptroller of the Treasury Department and 
emanating from Mr. Dodge, Assistant Attorney Gen- 
eral. What the contents of the communication may 
be I do not know. I understand, however, that 
Mr. Dodge, of the Attorney General's Department, 
has been directed by the Attorney General to assist 



your Honor in the legal investigation of this matter. 
His communication will undoubtedly be fully con- 
sidered by my associates, and it would be considered 
and commented upon by myself did the time permit 
me to give it examination. 

The Comptroller. I wish to say that I received 
the communication only last night. 

Mr. Manderson. I understand your Honor has 
just received the document. 

THE EQUITIES INVOLVED THAT CAUSED THE LEGIS- 
LATION IN QUESTION. 

I said in opening that this is a matter of magni- 
tude to the people of Nebraska and that it is one of 
grave importance to the people of the United States. 
I believe no case has ever been presented to any 
tribunal, no matter what its grade or what its com- 
position, that embodied greater, broader, cleaier, and 
more comprehensive equities than the case at bar. 
I wish the excessive heat and my regard for saving 
of time did not prohibit that I should go at length 
into the historical features of the sugar question. It 
would be well to present them, for I do not believe 
that you, sir, whose lines have been cast in other 
grooves than my own, whose life has been spent in 
a different locality, where it is not a vital question, 
appreciate what it would mean to this country to 
produce in those sections of the land adapted to 
sugar production a fair proportion if not all of the 
sugar that it consumes. True it is that you sit here 
to pass upon legal questions. You are here, as we 
claim, to construe statutes, but in the construction 
of statutes and in coming to conclusions under their 
construction, courts, like individuals, look frequently 
to the motives that actuated the legislative body. 
Now, for a moment at least, let us glance at some of 



the reasons that prompted the sugar legislation in 
the Congress upon which this claim rests. 

Under that system of protection in which I so 
firmly believe and in which the great mass of the 
American people so firmly believe, notwithstanding 
their political affiliations, protection to sugar has 
been extended almost from the beginning of the 
Government. Did time permit I might read to you 
by the hour the arguments that have been presented 
by leading public men of all parties in favor of the 
encouragement by every possible lawful method of 
the growth of sugar in this country. The experiment 
of protection by way of customs duty obtained for 
many years. In 1890 we found this condition pre- 
sented — a surplus in the Treasury beyond the needs 
of the Government; and a demand for the cutting 
down of the income derivable from customs duties. 
By the act of 1890, called the McKinley law, sugar 
was made free, and in lieu of the customs duty a 
bounty of one and three-quarter cents per pound or 
of two cents per pound depending upon the saccharine 
strength was given to those who would produce 
domestic sugar. The reasons for such action are 
obvious; they are well known, and I shall not take 
the time or weary \ou by reciting at length why it 
was that the bounty of the McKinley law was thus 
granted. By the bounty it was proposed not only to 
increase the production from sugarcane, but, follow- 
ing the example set to us by all of the important 
nations of Europe, adapted by reason of their soil 
and climate to the cultivation of the sugar beet, it 
was proposed to give an impetus to the growth of the 
beet and the pro 'net of sugar therefrom. What was 
the result? I speak by the book and from personal 
knowledge as well in telling you what was the result 
in the section of countrv in which I live. It was 



known from experiments had by German chemists 
that the soil of the West was better adapted to the 
development of this snn plant, this sugar plant of 
the North, than any other part of the known world. 
The soil had the ingredients, the sun had the vivi- 
fying power that would inevitably produce a greater 
degree of saccharine matter in the beet than it was 
possible to obtain in Germany, France or any of the 
countries abroad which had been accustomed to 
export sugar to us. It was manifest that by reason 
of other conditions — the increased cost of labor, the 
immense amount of money necessary to permit one 
to embark in this industry, which could not thrive 
and prosper under the protection of a moderate cus- 
toms duty — something more and something greater 
than customs duty was required, and the Government 
held out to those people the promise, the solemn 
legislative pledge, that if they w^ould embark upon 
this industry, if they w^ould invest the enormous 
amount of money necessary to produce the result 
desired, there should be paid to them from the Treas- 
ury of the United States the two cents per pound 
bounty of the McKinley law. 

The gentlemen who stand at the head of the great 
enterprise in Nebraska, the Oxnard brothers, four 
in number, had devoted all the years of their 
lives to the study of this question abroad. One of 
them had become one of the most expert chemists in 
the country; others of them had investigated the 
matter of the machinery necessary for the produc- 
tion of sugar from beets, and the practical parts of 
the business. They knew well the processes of 
growtli and production. They, with those who 
were associated with them, had the immense amount 
of money necessary to embark in the enterprise. 
They built first a factory at Grand Island, Nebraska,, 



from which the statement demanding your action 
emanates, and afterwards at Norfolk, Nebraska, 
erected a sugar plant. They put in each a half 
million dollars in round numbers, investing in the 
factories alone one million dollars because of and 
resting upon this legislative promise of the Govern- 
ment of the United States. 

That promise of the government, constituting, as 
I claim, as solemn a contract as can be made be- 
tween a nation and a citizen, was one that was to 
continue for a term of years. It provided that com- 
mencing the year of the passage of the bill and 
continuing until the year 1905 this bounty should be 
paid to those who produced sugar, either from cane, 
sorghum or the beet. Did these people have the 
right to rely upon this legislative statement of the 
Congress of the United States, approved by the 
President? If they could not rely upon it, on what 
could they rely? Certainly the pledge of the Gov- 
ernment should be as binding and reliable as that of 
an individual. They made this large money invest- 
ment; and what was the next step? At enormous 
expense, at a tremendous outlay they had to educate 
a class of people not apt to take quickly to novel ex- 
periments. They had to educate the farmers in the 
vicinity of the factories in the cultivation of this 
new plant. They imported their seed from Ger- 
many, and advanced the seed to those farmers. 
They started their schools of instruction. They 
sent out their agricultural educators to teach the 
farmers how to grow the beet which would contain 
the maximum amount of saccharine matter. Not 
only that, but under the direction of the Legislature 
of the State of Nebraska a department of agriculture 
was instituted in the State University; experimental 
schools were started with actual cultivation of the 



8 



soil by employes and pupils of the State. Men o 
learning were induced to investigate the question, 
and I have before me one of a series of bulletins, 
known as the sugar beet series, issued from the Ag- 
ricultural Experiment Station of the University of 
the State of Nebraska. At a great cost of money to 
individuals and to State, under the impetus and mo- 
mentum of this law, the effort was made to advance 
the industry that meant, as I believe, a greater boon 
to the farmers of this country than any other that 
could be granted by either General or State Govern- 
ment. 

The experiment went on through the years after 
1890. The bounty under the McKinley law accru- 
ing was paid without demur. No voice was raised 
against it in Congress; no man appealed to the 
courts; no man even addressed an official of the 
Treasury Department to try to prevent the payment 
of the bounty thus solemnly pledged by the Govern- 
ment of the United States; and through the years 
from 1890 to 1894 the bounty was paid to these peo- 
ple. Was it to their financial benefit, to their pe- 
cuniary advantage alone? No. Did it give them a 
profit? No. For the fact is, sir, that the beet sugar 
factories have thus far been maintained at a loss to 
those who embarked their money in them, notwith- 
standing the fact that a portion of these bounties 
have been received from the Government. Notwith- 
standing the amounts received, and even with the 
amount of money now due, the beet sugar people of 
Ncl)raska, small in comparison with that which is 
due the cane sugar growers of the South, great loss 
has been theirs from iheir embarkation on this ex- 
periment. I do ncyt believe that that loss would 
have continued to them had the McKinle\- bounty 
been kept upon the statute books as it was agreed 



i 



that it should be, until 1905. And why? Let nie 
for a moment give the reasons why. First, because 
the farmers of that section, intelligent, desirous of 
advancing their own interests, were quite quick to 
learn, after they were willing to commence the culti- 
vation. They have already greatly increased the 
sugar beet acreage, and if the industry is allowed to 
live will continue to increase it and require more 
factories to handle it year after year. 

In this year of grace, and thank God it is a year 
of grace and comparative plenty for us in the West, 
following the great drought of last year which put us 
in the slough of despond, there are 9,000 acres of 
beets under cultivation by reason of the contracts 
made with the farmers, that they should receive five 
dollars a ton for their beets, which contracts were 
made in view of the bounties promised. Profitable I 
say the industry would have been in the future had 
the INIcKinley bounty law continued, because of that 
American ingenuity and inventive skill, in which we 
take such pride and of which we boast, which was 
making and would make great improvements upon 
the old methods and many of the laborious hand 
methods were being, and would continue in greater 
degree to be, supplanted by the Yankee machines 
that sometimes seem to show an intelligence akin to 
that of man himself. 

But we fell upon the unfortunate year 1894, ^^^^ "^t" 
withstanding most vigorous efforts in the Congress 
of the United States to save this industry and pre- 
vent it from being strangled before it was fairly 
born, the Congress on the 28th of x\ugust, 1894, 
repealed the bounty clause of the McKinley law and 
left those citizens with their contract violated, with 
this industry threatened with destruction and with 
the investment thev had made under the invitation 



lO 

of the Government likely to be wiped from the face 
of the earth. It was an unrighteous, it was an 
unjust, it was almost an unlawful exercise of Con- 
gressional power. I need not refer to the causes that 
induced it. They are political largely, and I cer- 
tainly do not wish to enter into any political discus- 
sion at this time. 

These people found themselves thus w^orsted, thus 
"buncoed" in their transaction with the Govern- 
ment of the United States. They appealed to Con- 
gress. They said, "We recognize that you have 
the right to do this unrighteous thing, but for the 
sake of fairness and honest dealing do us at least a 
modicum of justice." Under the license issued to 
the Oxnard Sugar Company at Grand Island on the 
first day of July, 1893, beets were grown, sugar was 
produced, and the bounty partly paid. They came 
to the first day of July, 1894. There was pending 
in the Congress the Wilson bill, so-called. It was 
hardly believed that the final outcome of that meas- 
ure would be the repeal of the bounty provision of 
the law. No democrat in the Senate of the United 
States believed for a single moment that the bill 
which went to the House of Representatives would 
not be changed in the conference between the two 
houses and brought back with a continued but per- 
haps a diminishing bounty, or some equitable and fair 
compromise at least to those citizens who had thus 
invested their wealth on the invitation of the Gov- 
ernment. The history of the bill, in the conflict 
which ensued between the two houses, is a matter 
of notoriety. It was made a law with all its imper- 
fections by forcible and unusual methods; it was 
born by a sort of Caesarian operation, and unnatur- 
ally brought into life. It suited no one. 

The sugar producers found themselves, then, with 



II 



all bounty wiped from the statutes. Disheartened 
and with ruin staring them in the face, they started 
at the next session of Congress to try to save some- 
thing from the dreadful wreck. Uniting with the 
sugar planters of lyouisiana, those who have the 
larger stake here, the best sugar factors made stren- 
uous endeavor, appealing to the conscience of the 
Congress of the United States to do at lest half 
justice. They did not even get that. In recogni- 
tion of the fact that the sugar produced between the 
first day of July, 1894, and twenty-eighth day of 
August, 1894 (when the Wilson law became oper- 
ative and the McKinley law was repealed), was from 
beets produced in 1893 from sugar made under the 
McKinley law, and that it was manufactured under 
a license under the seal of the Treasury Department 
dated July i, 1894, sugar growers and producers did 
get from the Congress of the United States the 
agreement by law that they should be paid the 
bounty of two cents per pound of the McKinley law 
for the small amount of sugar thus produced. The 
appropriation of $238,000 is the full amount due to 
all who produced sugar between the first day of July, 
1894, when the license was issued, and the 28th day 
of August, 1894, when the McKinley law was 
repealed. 

What else did they get? By the terms of the 
Wilson law, a duty was re-imposed on sugar, and 
the effort was made to equalize somewhat for that 
year a bounty with the duty, and Congress agreed 
that they should be paid for sugar produced from the 
crop of 1894, eight-tenths of one cent per pound, 
instead of two cents per pound, which they would 
have received under the McKinley law. They have 
gone on under that renewed promise of the Govern- 
ment of the United States; they have gone on under 



12 

that solemn legislative coinproniise by the Congress 
of the United States; they have produced the sugar 
from the cane and beets that had been planted and 
they come to you, sir, holding to some extent the 
purse strings of this Government, and say to you, 
"Pay us what the Government owes." That is our 
mission hereto-day; and I tell you, Mr. Comptroller, 
that if by any method in Treasury Department or in 
court this boon shall be denied, disaster beyond 
description, misery beyond the power of painter will 
certainly ensue. You should avert and not precipi- 
tate that ruin. 

I leave to my friends from the sugar cane state of 
Louisiana to tell you what it means to them. I 
know what it means to the beet sugar producing 
section of the West. I could produce to you, did 
time permit, letter after letter written by the farmers 
of Nebraska, some of whom have been in this indus- 
try and others proposing to embark in it, begging 
and entreating that nothing be done that will disturb 
the continuance of these beet sugar factories. I 
believe as fully as I believe in my owm existence, 
that, if the bounty of the McKinley law had been 
continued, instead of two factories in the State of 
Nebraska there would be numerous others; that 
instead of 9,000 acres of beets, bidding fair to produce 
this year at least 12,000,000 pounds of sugar, there 
would be three or four times that acreage producing 
three or four times that amount of saccharine sub- 
stance. But that grand result apparently was not 
to be. 

What we plead for now is that at least these fac- 
tories, which mean so much to us, shall be permitted 
to eke out an existence, even if it be a miserable 
one. I wish I could have taken you with me in 
Nebraska last fall during the campaign, not only 



13 

that I might have had the pleasure of your society 
and heard you plead the cause of the Wilson law and 
heard you air your views upon finance and the tariff, 
but that I might show to you an object lesson. We 
had a drought there in 1894, the like of which has 
not been experienced in all the West since it has 
been settled. I traveled mile after mile through a 
scene of desolation, the grass burnt, the corn, which 
by the hot winds of early July, had been cooked in 
the ear, standing worthless even for fodder, the small 
grains destroyed, and yet, sir, even in that year of 
dreadful misery this underground plant, this creature 
of the sun, while it did not thrive as it would in an 
ordinary year, lived and bore fruit to the farmer. 
Mile after mile of the side tracks of railroads were 
filled with the empty cars that had no mission to 
perform. The only crop moving to the market and 
giving to the farmer some small compensation for his 
toil, was that of the sugar beet, which with its 
top blasted by the wind, still throve under the pro- 
tecting soil, and sugar was produced from it, as will 
appear to you by these statements and by some other 
documents which will come before you hereafter for 
consideration, and as I hope and expect for your 
allowance. 

Sir, wipe out this industry and you administer to 
the West almost a death-blow to its agricultural 
interests. We are meeting rivals and competition on 
all hands; we are meeting new fields of production 
in other lands in the crops we produce, and by some 
method we must save ourselves. In order to go on 
with^ur progress and advancement as a nation, we 
must by some method find new fields of production 
for ourselves, and even if we cannot enter foreign 
markets with the sugar we produce, at least save to 
ourselves the vast sum ranging between one hundred 



I 



14 

and two hundred million dollars, which we send 
abroad to pay those who produce sugar from the beet 
fields of Germany and Continental Europe and from 
the cane of the tropics. But I must not be betrayed 
into too much of this line of argument. It is a sub- 
ject upon which I feel deeply and to which I have 
given much study and thought. I could go on and 
present to you, most cogent reasons why in equity 
and good conscience, in fairness and a desire for the 
advancement of the best interests of this Republic 
you should shrink from any assumption or usurpa- 
tion of power and should place yourself in such posi- 
tion as to be satisfied beyond a reasonable doubt, as 
in the trial of a criminal, before you take the course 
which it has been suggested will be pursued in this 
case. 

THE POWERS OF THE COMPTROLLER OF THE 
TREASURY. 

Let me come to that which is the grave question 
before us to-day. We are here to try to construe 
your powers as the Comptroller of the Treasury, not 
to limit them, not to give the statute that defines 
your powders any strained or technical construction. 
We do not believe it is your desire to enlarge your 
powers. The official who attempts it brings simply 
additional trouble, greater cares and graver responsi- 
bility upon himself. I do not believe, Mr. Comp- 
troller, that you are that make-up of man who 
desires to assume any position or any responsibility 
which you do not conscientiously believe is devolved 
upon you by law. I need not go at length with you 
through the statutes to ascertain what your duties 
have been and what they are. Under the law as it 
stood until the passage of the legislative appropria- 
tion act of July 31, 1894, you were among other 



15 

things to "countersign all warrants drawn by the 
Secretary of the Treasury, warranted by law." In 
the so-called Dockery act, which is a part of the leg- 
islative appropriation law passed on the 31st of July, 
1894, apparently rather that really the definition of 
your duties was changed. I do not know that the 
change was a very material one, and as I have read 
this hasty piece of legislation, tacked improperly on 
an appropriation bill, I have found myself somewhat 
befogged by its provisions. lyCt us see what were 
some of the apparent changes and modifications of 
law. In the first place, I find by section four of the 
act that many offices were consolidated; that the 
offices of Commissioner of Customs, Deputy Com- 
missioner of Customs, Second Comptroller, Deputy 
Second Comptroller, and Deputy First Comptroller 
of the Treasury were abolished; and it was provided 
that the Comptroller should thereafter be known as 
Comptroller of the Treasury. Section four con- 
tinues: 

" He shall perform the same duties and have the 
same powers and responsibilities (except as modified 
by this act) as those now performed by or appertain- 
ing to the First and Second Comptrollers of the 
Treasury and the Commissioner of Customs; and all 
provisions of law not inconsistent with this act, in 
any way relating to them or either of them, shall 
hereafter be construed and held as relating to the 
Comptroller of the Treasury." 

This, then, was the creation of your office. It 
was a consolidation of many into one. Now let us 
look for a moment at the manner of settling ac- 
counts, and what were the duties with which the 
officials of the Treasury were charged under this 
new law, which seems to be that that created you in 
your present position. I read from section seven 
as follows: 



i6 



" The Auditor for the Treasury Department shall 
receive and examine all accounts of salaries and inci- 
dental expenses." 

In order to save time I shall not read all of the 
section, but come to this material part: 

"And relating to all other business within the 
jurisdiction of the Department of the Treasury, and 
certify the balances arising thereon to the Division 
of bookkeeping and warrants." 

Here is an account which would at first glance 
seem to be " business within the jurisdiction of the 
Department of the Treasury." I do not know 
whether this account, before its transmission to you 
by the Auditor, passed through the Division of Book- 
keeping and Warrants. 

The Comptroller. No, sir; it did not. 

Mr. Manderson. It came from the Auditor 
direct to you? 

The Comptroller. That was his action. His 
construction of the new statute came to me under sec- 
tion eight. 

Mr. Manderson. I am about to read that section. 
So the account comes to you approved by the Au- 
ditor for the Treasury Department as being in all 
respects a compliance with the law, and it comes to 
you, as he says in his letter, under section eight, 
which I shall now read. 

'' The balances which may from time to time be 
certified by the Auditors of the Division of Book- 
keeping and Warrants, or to the Postmaster General, 
upon the settlements of public accounts, shall be final 
and conclusive upon the Executive branch of the 
(Toverument." 

If we stopped there it would look as though the 
Auditor for the Treasury was the final and conclu- 



17 

sive authority upon the Executive branch, which 
would, of course, include yourself. But we go on: 

"Except that any person whose accounts may 
have been settled, the head of the Executive depart- 
ment, or of the board, commission, or establishment 
not under the jurisdiction of an Executive Depart- 
ment, to which the account pertains, or the Comp- 
troller of the Treasury, may, within a year, obtain a 
revision of the said account by the Comptroller of 
the Treasury, whose decision upon such revision 
shall be final and conclusive upon the Executive 
branch of the Government." 

So we have this position apparently under the law; 
and am I to take it that this matter is before you 
under that provision? 

The Comptroller. No, sir. 

Mr. M ANDERSON. You did not then call for it? 

The Comptroller. No, sir. It comes under 
another provision. 

Mr. Manderson. Then it was apparently sent 
to you by the Auditor for the Treasury and net 
called for by you under the provisions of section 
eight. 

The Comptroller. Yes, sir. It was sent here 
under another clause which you will find further on. 

Mr. Manderson. I will continue the reading. 

"Upon a certificate by the Comptroller of the 
Treasury of any differences ascertained by him upon 
revision, the Auditor who shall have audited the 
account shall state an account of such differences, 
and certify it to the Division of Bookkeeping and 
Warrants, except that balances found and accounts 
stated as aforesaid by the Auditor for the Post-Office 
Department for postal revenues and expenditures 
therefrom shall be certified to the Postmaster 
General." • 

Will you give me the part of the section to which 
you refer? 



i8 

Thk Comptroller. It is the third paragraph, 
and begins: 

''All decisions by Auditors making an original 
construction or modifying an existing construction 
of statutes, etc/' 

Mr. ^NIanderson. I have marked that clause and 
intended to read it. 

The Comptroller. The account comes to me 
under that clause of section eight. 

Mr. ]\I ANDERSON. That clause reads: 

"All decisions by auditors making an original 
construction'' 

And I take it this is claimed to be an original con- 
struction of the statute, because it for the first time 
construes the act of ]\Iarch 2, 1895 — 
"or modifying an existing construction of statutes 
shall be forthwith reported to the Comptroller of the 
Treasury, and items in any account affected by such 
decisions shall be suspended and payment thereof 
withheld until the Comptroller of the Treasury shall 
approve, disapprove or modify such decisions and 
certify his actions to the Auditor. All decisions 
made by the Comptroller of the Treasury under this 
act shall be forthwith transmitted to the Auditor or 
Auditors wdiose duties are affected thereby." 

I will read section nine: 

"This act, so far as it relates to the First Comp- 
troller of the Treasury and the several Auditors and 
deputy auditors of the Treasury, shall be held and 
construed to operate merely as changing their desig- 
nations and as adding to and modifying their 
duties and powers, and not as creating new^ ofhccb." 

I have now read the different processes by which 
accounts are to be audited and settled in this De- 
partment. Having reached your approval, then you 
pass it to the Auditor. The Auditor, on receipt of 
ihe account thus approved by you, I take it, trans- 



19 

mits it to the Secretary of the Treasury by reason of 
the provision of section eleven, which I will read. 

The Comptroller. He does not transmit it 
under that provision. He transmits it under the 
authority of the section you have read. 

Mr. Semmes. The Auditor certifies it to the 
Division of Bookkeeping and Warrants. 

Mr. Manderson. Does the account pass through 
that medium to the Secretary of the Treasury? 

The Comptroller. Yes. The Division of Book- 
keeping and Warrants is an olhce under the Secre- 
tary of the Treasury. 

Mr. Manderson. Then, having passed to the 
Auditor with your approval, it is transmitted to the 
Division of Bookkeeping and Warrants, and is then 
transmitted as a warrant to the Secretary of the 
Treasury. 

The Comptroller. That is to say, it is prepared 
in that division for his signature. 

Mr. Manderson. I understand. Then we have 
gone from the account filed through the processes of 
approval by the Auditor and transmission by him to 
the Comptroller, approval by the Comptroller, trans- 
mission to the Bureau of Bookkeeping and Warrants, 
and then its transmission to the Secretary of the 
Treasury in the form of a warrant to be paid. That 
brings us then to the final act by you of counter-sign- 
ing the warrant. 

Then I find the following provision of law, which 
is different in language, although perhaps not differ- 
ent in intent, from the old law I referred to author- 
izing the Comptroller of the Treasury to countersign 
a warrant drawn by the Secretary of the Treasury 
^ ' warranted by law ' ' : 

" All warrants, when authorized by law and signed 
by the Secretary of the Treasury, shall be counter- 



20 

signed by the Comptroller of the Treasury, and all 
warrants for the payment of money shall be accom- 
panied either by the Auditor's certificate, mentioned 
in section seven of this Act, or by the requisition for 
advance of money, which certificate or requisition 
shall specify the particular appropriation," etc. 

So there apparently is the process by which ac- 
counts of a general character pass under the inspec- 
tion of the accounting officers of the Treasury and 
reach at last the form of warrants signed by the 
Secretary of the Treasury and transmitted to you for 
countersigning. The course that should be pursued 
with accounts such as this under the sugar bounty 
law we will consider hereafter. 

Now, nothing, perhaps, is more difficult to point 
out, with respect to an executive official, the exact 
line where the limited judicial functions incident to 
the executive place cease and the ministerial powers 
begin. But, I am ready to admit at the outset that 
in passing upon accounts you act in a quasi-judicial 
capacity; I am ready to admit that as to this account 
you will act judicially — I had almost said judiciously, 
and I do not believe I will take back the word — that 
you will act judicially and judiciously with the 
claim and when the w^arrant shall come to you, and 
you will be exercising not only ministerial, but, as I 
believe, under the Dockery law, limited quasi-judicial 
functions. 

The Comptroller. On the countersignature of 
the warrant? 

Mr. Manderson. I am inclined to think so, sir, 
but I will speak of that later. 

The Comptroller. That is stronger than it is 
usually stated. 

Mr. Manderson. I am willing to admit that 
much for the sike of the argument, because it does 



21 



not change my position in the least as I will here- 
after explain. 

The Comptroller. That is stronger than is 
usually contended for. 

Mr. Manderson. I say so because of the lan- 
guage, which is: 

" All warrants, when authorized by law and signed 
by the Secretary of the Treasury, shall be counter- 
signed by the Comptroller of the Treasury." 

I am ready to admit, I say, for the sake of this 
argument that even in respect to countersignature 
you are exercising a quasi-judicial power or function 
and before you countersign the warrant you are to 
decide (it being signed by the Secretary of the 
Treasury) that it is authorized by law. 

Now what does that authorization by law mean? 
It means that you shall find and determine that it 
has passed the scrutiny and has received the approval 
of the Auditor and of yourself. So the quasi-judicial 
function thus exercised is so slight that it is practi- 
cally ministerial. 

The Comptroller. I agree with you. 

Mr. Manderson. If we are correct in that prop- 
osition, then we have struck, as it seems to me, a 
very material departure from the old law. No 
longer, then, are you in the position that you were 
under the old act which required that you should find 
that a warrant was warranted by law before you 
would countersign it. 

The Comptroller. Do you think there is any 
■difference between "warranted by law" and " auth 
orized ' ' ? 

Mr. Manderson. None whatever in the distinc- 
tion of terms, but the old statute did not contain 
these processes of advance in the settlement of an 
account. 



22 

The Comptroller. This does not come up as a 
process of advance, but on final settlement. 

Mr. Manderson. Of course this claim as made 
does. But I am speaking now of the warrant finally 
to come to you under the Dockery law. It comes up 
for final action, for you to look at it and say "this is 
a warrant based upon an account that the Auditor and 
the Comptroller have approved, and therefore being 
thus approved it is authorized by la\v. ' ' Under the old 
law, when the warrant was brought to you for coun- 
tersignature you had full right to go into all the 
law in order to ascertain whether it was warranted, 
while under the new Dockery act you are simply, 
by reason of the language, "authorized by law" to 
pass upon the question whether you yourself and the 
Auditor have approved the account on which it is 
based. 

Under either of these laws, however, the old or 
the ne\v, I submit to you that your power of ascer- 
tainment, either under the old language which 
required that you should find that the warrant was 
warranted by law or under the new language which 
provides that you shall revise and correct the action 
of the Auditor, and find afterwards that the warrant 
is autiioiized by law, vour powers are to construe 
and never to nullify the law. To construe means to 
preserve, not to destroy. 

This claim is before you, coming from the Auditor 
under the new or Dockery law, on an ""^ orig- 
inal construction^^ of a statute. That language, on 
its very face, clearly shows that it is only the con- 
struction or interpretation of the law that is left to 
the Comptroller, not the validity of the law; not the 
constitutionality of the law. This power to con- 
strue, interpret or expound the law given by the 
Dockery act is not new and does not add to your 



23 

former powers; in fact, the provision as it now 
stands seems to be a contraction of your power, 
because the power to construe or interpret seems to 
be now limited to cases where the Auditor makes an 
original construction of law or modifies an existing 
one. It was general theretofore and exiended to all 
cases. There is no power in you to declare a law 
invalid; the Comptroller is only to consider the 
question as to whether the Auditor's original con- 
struction of the law was the proper construction. 
If Congress had intended to allow the Comptroller 
power under this to attack the law itself as invalid, 
or as unconstitutional, words would have been used 
to express it. But it never will and it never has 
granted an executive officer such power. 

As to the Comptroller's power under the provision 
which now says that "All warrants, authorized by 
law and signed by the Secretary of the Treasury, 
shall be countersigned by the Comptroller," the 
signing of the warrant by the head of the Depart- 
ment or Secretary controls the Comptroller if the 
claim has has been acted upon under the requirements 
of the prior section of the Act. His countersigna- 
ture is perfunctory, finding as he must simply that he 
or the Auditor or both have passed favorably upon 
the claim on which it is based. It is so held under 
the old law of stronger language by Attorney General 
McVeagh. [17 Opinions Attys. Genl. p. 237.] 

In that opinion three questions were left to the 
Attorney General, the third being "Whether as 
claimed by the Comptroller the question of the legal- 
ity of warrants or requisitions is wholly within his 
jurisdiction, he being the only officer who counter- 
signs warrants, and whether the Secretary of the 
Treasury is legally bound by the opinion of the First 
Comptroller upon this point." 



24 

Answered in the negative and the Attorney Gen- 
eral said the Comptroller "contends, I understand, 
that the clause 'to countersign all warrants warranted 
by law,' requires him to examine into the legality of 
warrants granted by the Secretary, and by his coun- 
tersignature to certify to that legality; in other 
words, that the duties of the Comptroller are the 
same as to matters which have already received the 
decision of the Secretary of the Treasury as they are 
to accounts which pass through him from the Audi- 
tor to the Secretary. And, furthermore, he contends, 
that, by implication his decisions as to his counter- 
signature are as binding upon the head of the De- 
partment as his decions are under section 191 of the 
Revised Statutes, which make his decisions on bal- 
ances final and conclusive. I cannot assent to the 
proposition that a subordinate ofhcer, created by 
statute, can do any act binding upon the head of his 
Department until that force is expressly given to his 
decisions by plain and unambiguous law. It is sug- 
gested that the expression 'which shall be warranted 
by law' is pregnant with all that is expressed as to 
the binding effect of balances certified by him." 

The Attorney General goes on to explain what 
the purpose of the countersignature was in that case 
and then says: 

"If the law meant that the Comptroller is to 
decide * * and the Secretary of the Treasury is 
to hav^e no discretion but simply to register the 
decrees of the Comptroller, the language of the law 
would have been more apt if it had directed 'the 
Comptroller to sign and the Secretary of the Treasury 
to countersign.' " * * * 'Xhe Attorney General 
then quotes 16 Court of Claims, Real Estate Savings 
Bank vs. Pittsburgh, where Richardson, Justice, said, 
after citing section 191 of the Revised Statutes: 

" In other respects the Comptrollers are as much 
subject to the rules, regulations and directions of the 
Secretary of the Treasury, and as much bound to 
obey and be governed by them, as are all other sub- 
ordinate ofhces in the Treasury Department." 



mmm 



25 

And finally the Attorney General quotes volume 5 
of Hamilton's works page ']'] to the effect that 
countersigning means that the officer shall have an 
opportunity to observe the conformity of receipts 
and payments with the course of business as it 
appears in the accounts. 

In the Gibbs claim (5 Opinions of Atty. Gen.) 
the principle contended for is stated by Reverdy John- 
son in this language: 

"Both houses of Congress having resolved that the 
claim was provided for by the act of 1832 and the 
House having done so again at the last session, after 
the executive department had, more than once, main- 
tained a different doctrine I am of the opinion that a 
proper deference to the legislature, demands that its 
construction should be adopted. That a claim should 
be rejected, because Congress had not, in its opinion, 
provided for it, and the claimant be referred to the 
latter [Congress] for relief, and going there, be 
referred back to the Executive by Congress, because 
in its opinion, it had provided for it by existing law, 
and that it should s.ill be disallowed, would, in my 
opinion, be a reproach upon the justice of the Govern- 
ment, which it is not only in the power, but the duty 
of the Executive to prevent." 

This points sharply to what transpired in the 
celeb "ated Carmick-Ramsay case (which I will 
again refer to), to wit, that Comptroller Medill 
resigned and gave way to his predecessor, who found 
for the claimants but died before his finding was 
recorded and in turn Comptroller Taylor found for 
the claimants. 

Take this case: July 5, 1832, Congress passed an 
act requiring and directing the Secretary of the 
Treasury to pay the State of Virginia certain judg- 
ments. It also required the accounting officers of 
the Treasury to liquidate and pay Virginia certain 
other claims. (4 Stat, at Large, p. 563.) It appears 



26 

that the Treasury officers did not interpret the act to 
please Congress, whereupon Congress gave its inter- 
pretation in 1835 and again in 1848 (9 Stat, at Large^ 
p. 297), and yet the Interior Department held the 
matter up. In 1849, Reverdy Johnson gave it as his 
opinion that the acts of Congress were "to be con- 
sidered as legislative interpretations of the act of 
1832 and as the expression of an opinion by Congress, 
with whom the propriety of paying the claims 
altogether rests. * * * j ^i^\y^]. ^\^\^ 

should be and is binding on the Executive." (5 
Opinions Atty. General.) 

No act has ever been passed that gives the Comp- 
troller of the Treasury, or any other executive 
officer, the right to pass upon the constitutionality 
of a law. Congress has never been guilty of any such 
an absurdity. It would be an abrogation of its own 
rights and an encroachment upon the powers of that 
great co-ordinate branch of the Government, the 
judicial power. I believe that if the Congress of the 
United States had, in express terms, said the Comp- 
troller of the Treasury, or any other executive officer, 
shall pass upon the constitutionality of a statute 
directing him to perform a certain duty, the Supreme 
Court of the United States would have said that the 
Congress of the United States could not delegate such 
power. But I need not enlarge upon that proposi- 
tion. 

Now, what may you do as to accounts? You may 
adjust an account under authority or under warrant of 
the law or a law. Take either phrase you please. 
You may ascertain balances under a law or under 
the law; you may ascertain differences under the 
law or under a law. In short, having found upon 
the statute books a law, you may construe it, you 
may expound it, but you cannot veto it, you cannot 



27 

kill it. It is not in the hand of an execntive officer 
that the Constitution of the United States and the 
framers of our republican government placed the 
power to thus act. 

HOW LAWS ARK CREATED. 

Let us see how a law is created, for in the very 
nature of things, one must, in the argument of this 
question, get to that which is elementary and funda- 
mental. It may strike a listening lawyer as a little 
absurd that a man should appeal to the ground-work 
and foundation of the Republic, with which we are 
all so familiar, and yet it will not do for us to depart 
from tiieir consideration. The unfortunate thing is 
that we do not often enough appeal to them and 
consider them. How is a law created? Being in- 
troduced as a bill, it receives the consideration of 
the two Houses of Congress by the forms that are 
familiar to us, by reference to committees, by pass- 
ing both Houses and receiving the signatures of the 
presiding officers. Take this law, conceived and 
born in the manner I have heretofore described, even 
it received all the formal requirements of the law- 
making authority of the Constitution of the United 
States. The bill, in its numerous forms, went to 
the proper committees of the two Houses. The 
question of the constitutionality of its provisions, 
particularly the question of the constitutionality of 
the section in question, revivifying in part the Mc- 
Kinley bounty law, passed the scrutiny of those 
committees, and the question of its constitutionality 
and the constitutionality of all bounties, was debated 
upon the floor of both Houses. In the senate par- 
ticularly there was both length and strength of de- 
bate upon that question. Congress is certainly the 



28 



proper authority to debate and consider whether 
in passing a bill it is exercising power within its 
constitutional limit. It did in this case, as it is 
presumed it usually does in every case. Then what? 
Having passed the two houses it went to the Presi- 
dent of the United States. 

Time was, and it may come again, when learned 
men advocated that the veto power of the President 
of the United States should be limited and was by 
the Constitution designed to be limited to his con- 
sideration of the constitutionality of an act and 
however much he might differ with the law-making 
power as to the advisability of the law, he should not 
veto it unless he found it was unconstitutional or 
that by the record it was passed by unconstitutional 
methods. I quote from Justice Miller on the Con- 
stitution of the United States, page 174: 

\'It has been contended that the only proper oc- 
casion for the President to deny his approval by a 
message to Congress, refusing to sign a bill, is, when 
the bill IS not in his judgment within the constitu- 
tional power of the Legislature. In such case it has 
been thought to be his duty to interpose his objection, 
and the doctrine has been advanced with much 
earnestness, that on no other account is he justified 
in setting up his opposition to the more popular 
legislative branch of the Government." 

But we have enlarged that limit. Vetoes have 
come upon us thick and fast of late years, some of 
them of a desirable quality, I must admit. But the 
President of the United States never approves a bill 
that has passed the two Houses of Congress with- 
out first considering the question whether the law 
proposed is within the power granted to Congress 
and to hiin by the Constitution. He did it in this 
case, for Grover Cleveland is not a man who neglects 
duty, when it comes to the consideration of the acts 



29 

of the Congress of the United States. He, the Chief 
Executive, he the creator, with tlie advice and con- 
sent of the Senate, of every official in this Depart- 
ment, he the supreme head has said this law is 
constitutional and has approved it as such. 

Are you to over-ride his decision thus expressed 
by his approval of the bill? Shall the created be 
greater than the creator? It seems to me that if 
there were no other reason under the heavens, and if 
judicial power vested in every executive officer of the 
Government of the United States, the fact that the 
Chief Executive of this nation has declared the law 
constitutional should work as an estoppel upon all 
others. When he has vetoed a bill or has approved 
it, he has exhausted his power of the consideration 
of its constitutionality. Can it be possible that the 
powder thus exhausted by the President can after- 
wards be used by one of his subalterns? 

DIVISION OF POWER. 

I say it is well to turn to fundamental principles. 
This Government of ours we are often told is com- 
posed of three co-ordinate branches, the legislative, 
the executive, and the judicial — the legislative to make 
the laws, the executive to enforce or execute the 
laws, and the judicial power to construe. Yet it is a 
fact that to some limited degree these different 
departments at times partake of the nature of each 
other. At times the legislative department partakes 
of the executive power. I need not mention the 
circumstances but notably one is when the Senate of 
the United States advises and consents to the appoint- 
ments of the President. The President of the United 
States partakes to a limited degree of the law- 
making power when he vetoes or approves a measure. 



30 

But when a bill has been passed by Congress and 
when it has been approved by the Executive and is 
upon the statute-books as a law, then I submit there 
is but one authority that can nullify, that can 
destroy it. There can be no reconsideration of an 
approval by the President of the United States and 
no cv post facto veto, either in fact, by failure to 
execute it or by manifesto declaring that he had 
made a mistake and that he ought to have vetoed it. 
When the bill becomes a law the only authority that 
can destroy its vitality, that can take its life is the 
judicial power, and the Supreme Court of the United 
States alone can deal the death blow. No meaner 
court of all the judicial system can exercise that 
power. It is a law until the Supreme Court says it 
is a nullity for the reason that its passage was 
beyond the constitutional powers of the Government 
vested in Congress. 

We are told that the functions of these different 
departments are distinct and that their powers are 
equal wnthin the law. That nobody will deny. Its 
denial threatens danger. The destruction of the 
doctrine means the destruction of the Government of 
the United States. Distinct they are while equal, 
and one will tread upon the sacred ground of the 
right of the other with fear and trembling. If the 
time shall come when that is forgotten and there 
shall be invasion of the rights of any one by either 
of the others, then good by free Government and 
farewell li])erty. 

Now let us go to fundamental principles for a 
moment. Turning to Sutherland on Statutory Con- 
struction, pages 2 and 3, I find he sums the matter 
up most clearlv. 

"The separation of the three distinct departments 
is deemed to be of the greatest importance; absolutely 



31 

essential to the existence of a jnst and free govern- 
ment. This is not however snch a separation as to 
make these departments wholly independent; but 
only so far that one department shall not exercise 
the power or perform the functions of another. They 
are mutually independent and could not subsist 
without the aid and co-operation of each other. 
Under the constitutions the legislature is empowered 
to make laws; it has that power exclusively; the 
executive has the power to carry them by all execu- 
tive acts into effect and the judiciary has the exclu- 
sive power to expound them as the law of the land. 
The functions of each branch are as distinct as the 
stomach and lungs in our bodies." 

Baron Montesquieu in his spirit of laws says: 

"When the legislature and executive powers are 
united in the same person or the same body of mag- 
istrates there can be no liberty." 

Dr. Paley the great philosopher says: 

"The first maxim of a free state is that the laws 
be made by one set of men and administered by 
another." 

Blackstone says: 

' ' In all tyranical governments the supreme mag- 
istracy, or the right of both making and enforcing 
laws is vested in the same man or one of the same 
body of men; and whenever these two powers are 
united together there can be no public liberty." 

Says Chancellor Kent: 

"When laws are duly made and promulgated they 
only remain to be executed. No discretion is sub- 
mitted to the executive officer. It is not for him to 
deliberate and decide upon the wisdom or expediency 
of the laws. What has been once declared to be 
law, under all the cautious forms of deliberation pre- 
scribed by the constitution ought to receive prompt 
obedience. The characteristical qualities required 
in the executive department are promptitude, decision 
and force." 



32 

I would apologize for thus quoting from the 
A B C of the law but for the novel spectacle here 
presented that a subaltern executive official proposes 
to usurp the power of the Supreme Court and destroy 
a law that his chief has declared to be a constitu- 
tional law. Surely the occasion requires that we 
should revert to first principles. 

Kent further says: 

"The judicial department is the proper power in 
the Government to determine whether a statute be 
or be not constitutional." 

He then proceeds to show with what hesitation 
and caution they exercise such power. 

I read now from Cooley on Constitutional Limita- 
tions, page 194: 

"The legislative and judicial are co-ordinate de- 
partments of the Government, of equal dignity; each 
is alike supreme in the exercise of its proper func- 
tions, and cannot directly or indirectly, while acting 
within the limits of its authority, be subjected to the 
control or supervision of the other, without an un- 
warrantable assumption by that other of power, 
which, by the Constitution, is not conferred upon 
it. The Constitution apportions the powers of Gov- 
ernment, but it does not make any one of the three 
deparments subordinate to another, when exercising 
the trust committed to it. The courts may declare 
legislative enactments unconstitutional and void in 
some cases, but not because the judicial power is 
superior in degree or dignity to the legislative." 

I might read much of similar import and nothing 
can be found to the contrary. 

Mr. Comptroller, I have searched and my asso- 
ciates have searched for some authority either in 
standard text book or in reported and adjudicated 
cases that declares the right in an executive officer 
to annul a law by passing upon its constitutionality. 



33 



It may be that more vigorous search in remoter and 
more obscure channels would disclose that a court 
somewhere had so stated, but I do not believe it. I 
have even searched in the reports of the Comptrollers 
of the Treasury for such authorization. However 
high may be and is my opinion of yourself from 
every ground of personal acquaintance and from 
your well-established reputation, I think there have 
been men in that chair, your predecessors, your 
equals in ability and reputation, who have sometimes 
been disposed to magnify their place. Rumor has it 
that that has been the fact, but I am unable to find 
even in such magnifying of the office, the contention 
or claim that the Comptroller of the Treasury under 
the authorization of any statute in the past, certainly 
not amplified but decreased by the Dockery act, has 
the right to pass upon the constitutionality of a law. 
If he should, if any executive officer shall do it, I 
submit to you that it is an invasion of the power of 
Congress; it is an infraction of the pcrogative of the 
Chief Executive, which perogative in this case he 
has exercised and which power he has exhausted, 
and above all it is a most hazardous encroachment, 
a most dangerous usurpation of the power which 
under our frame work of Government is lodged in the 
judiciary alone. 

THE CARE EXERCISED BY THE COURTS. 

When it comes to the consideration by the highest 
court in the land of the question whether an enact- 
ment of Congress, particularly one that has received 
the approval of the President shall be examined as 
to its constitutionality, with what care do they pass 
to its consideration. The supreme judge of a State, 
on a State bench of highest resort, approaches the 

3 



34 

consideration of that qnestion with diffidence and with 
distrnst. The Snprenie Conrt of the United States 
in every case that is reported where it has spoken of 
this great power, its greatest attribute, has declared 
that it is to be exercised with a caution and care 
wdiicli they give to the consideration of no other 
question that may come before it. The question 
involving the constitutionality of a statute may be 
one insignificant in its results, but courts bring 
greater delicacy and caution to its consideration, 
limited at it is in its results, than they bring to the 
consideration of the construction of a law and the 
weighing of evidence where millions of property, 
aye even where the life of a citizen is at stake. 

Let me read again from Cooley, pages 194 and 195: 

"It must be evident to any one that the power to 
declare a legislative enactment void is one which the 
judge, conscious of the fallibility of the human judg- 
ment, w^ill shrink from exercising in any case where 
he can conscientiously and with due regard to duty 
and official oath decline the responsibility. 
********** 

"In declaring a law unconstitutional, a court must 
necessarily cover the same ground which has already 
been covered by the legislative department in decid- 
ing upon the propriety of enacting the law, and they 
must indirectly overrule the decision of that co-ordi- 
nate department. The task is therefore a delicate 
one, and only to be entered upon w^ith reluctance and 
hesitation. It is a solemn act in any case to declare 
that that body of men to whom the people have com- 
mitted the sovereign function of making the laws for 
thecommonwealth, have deliberately disregarded the 
limitations imposed upon this delegated authority, 
and usurped power which the people have been care- 
ful to withhold." 

In their hesitation at assuming this delicate duty, 
kt me call your attention to the safeguards that they 



35 

ha\e thrown about themselves, tlie iKirriers they 
themselves have created to prevent the undue and 
uncautious exercise of this tremendous power. 

First let me call your attention to the fact that 
they usually require a majority of all of the bench 
and not a majority of the quorum of the bench. All 
other questions are passed upon by argument to a 
quorum of the court, but when it comes to the ques- 
tion of the constitutionality of a law, when it comes 
to a decision as to whether they will override the co- 
ordinate department, they say, ''no, no; let us have 
the full bench here and let us have a majority of all, 
that before trampling uuder our feet the law passed 
by the servants of the people we sha^l be fully 
assured that we are doing right." 

Second, they require that the very point of uncon- 
stitutionality must be necessary to determine the 
case; a familiar principle. If they can decide the 
case on any other question, important or unimpor- 
tant, vast or small, they sieze it with avidity rather 
than take the grave responsibility of nullifying an 
act of Congress appioved by the Chief Executive. 

Third: it cannot be raised by any parties whose 
rights are not directly involved. No stranger to the 
record can come in and say '' the act under which 
this right was attempted to be enforced is unconsti- 
tutional." Not only can no stranger come in and so 
say, but no party to the suit can so say unless his 
rights are directly involved in passing upon the 
question. 

Fourth: no court, however high, wiil overrule the 
legislative will expressed by law on the ground that 
it is unjust and oppressive in its provisions or be- 
cause it is supposed to violate the natural, social, or 
political rights of the citizen. The books are full of 
this doctrine. Judge Cooley has collected them on 



36 

pages 203 and 204, and let me for a moment refer to 
them. 

''The moment a court ventures." 

Says Cooley, commenting upon the cases reported 
in the notes — 

"The moment a court ventures to substitute its 
own judgment for that of the legislature, in any case 
where the Constitution has vested the legislature 
with power over the subject, that moment it enters 
upon a field where it is impossible to set limits to its 
authority, and where its discretion alone will measure 
the extent of its interference." 

He quotes then from 2 Rawle, in Commonwealth 
vs. McCloskey, wherein the court said: 

"If the legislature should pass a law in plain and 
unequivocal language, within the general scope of 
their constitutional powers, I know of no authority 
in this Government to pronounce such an act void^ 
merely because, in the opinion of the judicial 
tribunals, it was contrary to the principles of natural 
justice; for this would be vesting in the court a 
latitudinarian authority which might be abused, and 
would necessarily lead to collisions between the 
legislative and judicial departments, dangerous to 
the well-being of society, or at least not in harmony 
with the structure of our ideas of natural gov- 
ernment." 

Then citing the case of Beebe vs. State, 6 Ind. and 
many other authorities, he quotes from the opinion 
by Stuart, Justice, in the Beebe case as follows: 

"All the courts can do with odious statutes is to 
chasten their hardness by construction. Such is the 
imperfection of the best human institutions, that, 
mould them as we may, a large discretion must at 
last be reposed somewhere. The best and in many 
cases the only security is in the wisdom and integrity 
of public servants, and their identity with the peo-^ 
pie. Governments cannot be administered without 
committing powers in trust and confidence." 



2>7 

He then cites from 21 Ohio, Walker vs. Cincinnati, 
as follows: 

"If the act itself is within the scope of their 
anthority, it must stand, and we are baund to make 
it stand, if it will upon any intendment. It is its 
effect, not its purpose, which must determine its 
validity. Nothing but a clear violation of the Con- 
stitution — a clear usurpation of power prohibited — 
will justify the judicial department in pronouncing 
an act of the legislative department unconstitutional 
and void." 

Then I quote again from the text: 

"The courts are not the guardians of the rights of 
the people of the State, except as those rights are 
secured by some constitutional provision which 
comes within the judicial cognizance. The protec- 
tion against unwdse or oppressive legislation, within 
constitutional bounds, is by an appeal to the justice 
and patriotism of the representatives of the people. 
If this fail, the people in their sovereign capacity 
can correct the evil; but courts cannot assume 
their rights.." 

Thr Comptroller. Does not simply mean that 
the courts will not invade the legislative discretion? 

Mr. Manderson. That is exactly what it 
means. It means that there must be the clearest 
possible violation of the Constitution, as some of the 
authorities express it that the judge should be satis- 
fied beyond a reasonable doubt in the exercise of this 
powder that the legislature or the Congress has over- 
stepped its constitutional functions. 

Nor will courts exercise the power of nullifying 
laws because they are unconstitutional, because they 
appear to the minds of the judges to violate funda- 
mental principles of republican Government. Cooley 
then quotes from Chief Justice Chase in the license 
tax cases reported in 5 Wallace: 



3^ 

''There are undoubtedly fundauiental principles of 
morality and justice which no legislature is at liberty 
to disregard, but it is equally undoubted that no 
court, except in the clearest cases, can properly im- 
pute the disregard of those principles to the legisla- 
ture. * * * This court can know nothing of 
public policy except from the Constitution and the 
laws, and the course of administration and decision. 
It has no legislative powers. It cannot amend or 
modify any legislative acts. It cannot examine 
questions as expedient or inexpedient, as politic or 
impolitic. Considerations of that sort must in gen- 
eral be adressed to the legislature. Questions of 
policy there are concluded here." 

Now, why do I invoke this principle? Why do I 
say that the courts never declare a law a nullity un- 
less it is the clearest possible infraction of the Con- 
stitution by the legislative power? Why do I say 
that they will not nullify a law on the ground of un- 
just and oppressive provisions or because it is sup- 
posed to violate some natural, social or political 
rights of the people? Why do I say that they will 
not nullify a law, because in the opinion of the 
judges it violates some fundamental principle of re- 
publican government? Because essentially in this 
case now in hearing, pervading every mind that 
comes to deliberate upon it, is the all-absorbing ques- 
tion of the rights of the Government and its duty to 
its citizens in the matter of protection either by im- 
post duty or by bounty. And I invoke it because I 
say that I as a republican, you as a democrat, must 
in the consideration of this case throw out of mind 
and utterly destroy in mental consideration any polit- 
ical theories, if it is possible for human mind to ac- 
complish that result. You and I may differ; I pre- 
sume we do differ upon the political question of the 
tariff. I am a protectionist of protectionists. I 
believe in protection l)y ])ounty and by duty as firmly 



39 

as I believe in anything. I believe it is not only 
within the constitutional power of the Con<^ress of 
the United States to thus impose duties and thus pay 
bounties, but I believe it is a bounden duty, in le^^iti- 
mate desire for the advancement of this country, that 
it should exercise that powder to the utmost. I take 
it you, being of the opposite political faith, do not 
believe that. But I say that in the consideration of 
this question neither you nor I have the right to turn 
to our individual political views for its decision. We 
cannot settle this question as we would one arising 
on the hustings. We must pass elsewhere. We 
must construe this instrument, this sacred funda- 
mental law for individual guidance by the language 
of the men who created it. We must construe it for 
executive or judicial guidance by the action of the 
highest court competent to decide, and you must not 
construe it, being a part of the executive branch of 
the Government, when your construction extends to 
the point of destruction, nullification or wiping out 
of the law, because that is the province, the delicate, 
the dangerous duty of the Supreme Court of the 
United States alone. 

Sixth. The authorities are abundant that the 
courts will not hold a law unconstitutional because it 
is opposed to the spirit of the Constitution. No 
theorizing will do, no branching out into the realms 
of speculation; none of that. Not what we think 
the Constitution ought to be, not what we should 
like it to be; not as we should like to have it con- 
strued by some strained process; not its spirit, but 
the actual literal translation of its terms. I say the 
opposition between the law and the Constitution 
must be clear and strong. I shall read only from 
the syllabus of the case, which I shall have occa- 
sion in the supplementary proceeding which arose 



40 

under it to refer to at greater length. This is the 
case of the people of the State of Illinois vs. Ed- 
ward S. Salomon, County Clerk of Cook County, 
decided at the January term, 1868, of the Su- 
preme Court of Illinois: 

' ' The opposition between the law and the Consti- 
tution must be clear and strong, otherwise the law 
will be upheld. The presumption that the Legis- 
lature has committed an unwarranted act will not be 
indulged; the fact must be clearly established." 

With these safeguards that the judiciary has 
thrown about itself, not imposed by the Constitution, 
but self-imposed, it seems to me an executive officer 
should hesitate to assume so grave a responsibility. 
Even if he believes that it is within his province, if 
courts so shrink from it, if courts so evade it, it 
seems to me no man in the Executive Department 
should assume it, even if he thinks he has such power. 

NO PRECEDENT FOR POWER NOW CLAIMED. 

I have said there is no precedent for this assump- 
tion of power on the part of any executive official. 
Mr. William Lawrence w^as at one time Comptroller 
of tlie Treasury. I do not know that I ever met him 
personally, but as I have looked through these vol- 
umes that contain the report of his decisions, I am 
struck with his great industry and with the evidences 
of his ability, and I think it is unfortunate that we 
have not had other Comptrollers as industrious. We 
have had others as able, but I do not believe many 
men in the executive departments have built up such 
monuments of industry as the First Comptroller's 
decisions in six volumes, prepared and published by 
Comptroller William Lawrence. He was disposed to 
enlarge the importance of his office but even he never 



41 

went so far or claimed the right to annul a law for 
unconstitutionality. I have looked in vain, as I have 
said, for any precedent. In the very excellent and 
able introductions to these different volumes, notably 
in his introduction to the first volume, on page 7, of 
the introduction and following, he comments with 
particularity and detail upon the duties of the First 
Comptroller under that provision of the law then ex- 
isting, which I say was more forcible than the 
language in the Dockery act, that he must find that 
the warrant is "warranted by law." And if Your 
Honor will glance, if you have not already done so, 
through this introduction, you will see how he lists 
and numbers the different questions that come before 
him, comments upon his duties; and in a case most 
voluminously reported, containing within itself a 
very large amount of unnecessary repetition, which 
makes its consideration extremely laborious, known 
as the Bender case, reported on page 317 of the ist 
volume. Your Honor will find in detail a considera- 
tion of the duties of the Comptroller's office as it 
then existed, the duties of the F'irst Comptroller, the 
duties of the Second Comptroller and the Secretary 
of the Treasury, but I say you will look in vain to 
find in these books any precedent for the proposition 
that an executive ofliicer can thus invade the province 
of the judiciary. 

I have referred to the case in 46 Illinois, 
known as the Salomon case. General Salomon was 
the clerk of Cook County. The South Park Com- 
missioners had a right, as they claimed under the 
law, to make an estimate for transmission to the 
county clerk of Cook County of the cost in the com- 
ing fiscal year for parks, and the law made it the 
duty of the county clerk on his receipt of that esti- 
mate to place on the tax duplicates the amount 



42 

necessary to be collected by taxes for that purpose. 
Salomon received the estimates from the commis- 
sioners and refused to place the assessment necessary 
to collect the amount upon the tax duplicates that 
were to be transmitted by him to the tax collectors. 
The authority from which I read in 46 Illinois is the 
proceeding in which a mandamus was issued against 
him to compel him to act under the law, which he 
declared was unconstitutional. He did not act after 
the mandamus issued. He still refused. (3n the 
complaint of the attorney general of the State of 
Illinois he was brought before the court for contempt 
of its process. 

The Comptroller. That is the case reported in 
54 Illinois. 

^Ir. Mamdersox. I am glad to see that Your 
Honor has had occasion to look at that case. 

The Comptroller. I have not read the case; 
I have seen it referred to. 

]\Ir. Mandersox. Tlie judge who issued the 
mandamus was Chief Justice Breese, a learned, 
accomplished, honest jurist. The decisions written 
by the Chief Justice Breese, constituting a part of 
the adjudications of the great State of Illinois are 
amongst its choicest judicial ornaments. No man 
stands higher on any supreme bench than did Mr. 
Chief Justice Breese. I read first from the syllabus 
of the case: 

"Nor was it a sufficient answer in the proceeding 
for contempt in failing to obey the pre-emptory man- 
damus, that the clerk had placed the books in the 
hands of the township collectors, and so beyond his 
control whereby it had become impossible to obey 
the writ, such action on the part of the clerk result- 
ing from his original refusal to obey the law^ itself, 
he assuming to decide the law under wdiich the 
board of equalization acted to be unconstitutional, 
and placing his refusal to obey it upon that ground.'* 



43 

Now mark it. Before the issuance of the maiida- 
miis he had sent the books to the collectors. When 
the mandamus came to him he tried, as he shows in 
his answer in the contempt proceeding by every 
means in his power to obey the mandate of the 
court, he begged for the return of the books 
that he might obey the order of the court, 
but the collectors refused. They said ''these 
books are in our hands under the law, and we have 
only until such a time to perform our duty. Time 
will not permit us to return them to you.'' He 
showed the vigorous efforts that he had made to obey 
the order of the court, as is shown in the syllabus 
and will be shown in the opinion. The syllabus 
continues: 

"A ministerial officer cannot be allowed to decide 
upon the validity of a law, and thus exempt himself 
from responsibility for disobedience to the command 
of a pre-emptory mandamus, his disobedience to the 
law being the cause, of his inability to obey the com- 
mand of the court. It is the duty of a ministerial 
officer to obey an act of the legislature directing his 
action, not to question or decide upon its validity." 

" Nor was it any justification to the clerk in such 
case, for his refusal to execute the law, and his 
consequent inability to obey the writ of mandamus, 
that by the action of other county officials, a public 
sentiment and feeling were created against the execu- 
tion of the law, which it was the duty of the officer 
to obey regardless of snch considerations." 

Now let me read from the opinion. Here is no 
dictum, but here is very forcible use of the king's 
English by a man who understood the full use of 
every word he uttered and how aptly and forcibly it 
applies here. 

"The law under which this additional tax was 
imposed, had passed the legislature under all the 
forms of the Constitution, and had received executive 



44 

sanction, and became, by its own intrinsic force, the 
law to you, to every other public officer in the State, 
and to all the people. You assumed the responsi- 
bility of declaring the law unconstitutional, and at 
once determined to disregard it, to set up your own 
judgment as superior to the expressed will of the leg- 
islature, asserting, in fact, an entire independence 
thereof. This is the first case in our judicial history, 
in which a ministerial officer has taken upon himself 
the responsibility of nullifying an act of the legisla- 
ture for the better collection of the public revenue — 
of arresting its operation — of disobeying its behests, 
and placing his own judgment above legislative 
authority expressed in the form of law. 

"To the law every man owes homage, 'the very 
least as needing its care, th^ greatest as not ex- 
empted from its power.' To allow a ministerial 
officer to decide upon the validity of a law w^ould be 
subversive of the great objects and purposes of gov- 
ernment, for if one such officer may assume infalli- 
bility, all other like officers may do the same, and 
thus an end be put to civil government, one of 
whose cardinal principles is subjection to the law^s. 

"Being a ministerial officer, the path of duty was 
plain before you. You strayed from it, and became 
a volunteer in the effort to arrest the law, and it 
was successful. Had the property owners, who 
were subjected to this additional tax, considered the 
law unconstitutional, they could, in the proper 
courts, have tested the question; and it w^as their 
undoubted right so to do. 

"Your only duty was obedience. The collected 
will of the whole people was embodied in that Islw. 
A decent respect to them required that all their serv- 
ants should obey it. 
* * * * » * * 

"In coming to a conclusion in this case, our atten- 
tion has been arrested by a part of your answer to 
the third interrogatory of the Attorney General, 
w^herein you say that by the action of the financial 
committee of the board of supervisors, about the 
fifteenth of October, 1867, in directing you not to 



45 

extend the additional tax, and by the ahnost unan- 
imous direction given by the board of supervisors, 
by resolution, passed at the following December 
session, to the same effect and purpose, a public 
sentiment and feeling were created against its execu- 
tion that continued after the issuing of the writ of 
mandamus, and was very embarrassing to you. 

"This leaves your conduct exposed to the infer- 
ence that, as a public officer, charged with the per- 
formance of an important duty, involving, in some 
degree, the welfare of the State, you desired to 
interpose the advice and determination of other 
county officials, who were under no responsibility 
whatever in the particular case, and that you would 
invoke an excited public opinion to justify a derelic- 
tion of duty. You certainly were not unaware that 
every man who obtains public office, takes it with all 
its responsibilities, and voluntarily comes under a 
pledge to the constituents that they shall be fully met 
and promptly discharged. No public officer should 
shrink from the performance of a duty imposed by 
law because public sentiment may be opposed to the 
law. To sustain a plea that he was deterred from 
action by an excited public opinion, would put an 
end to civil government. There can be no brighter 
exhibition of the moral sublime than a persistent per- 
formance of duty, unswayed by popular clamor, and 
undismayed by threats of popular vengeance. How- 
ever much an angry crowd of to-day may denounce 
the officer, the sober, second thought of to-morrow 
will as loudly applaud." 

I now present a late case reported in 40th Ne- 
braska, page 854, State vs. Eugene Moore, Auditor 
of Public Accounts, decided by a very able bench at 
the January term, 1894. 

There, as here, an executive officer charged with 
the duty of examining and adjusting accounts, one 
who held as you do the public purse, honestly and 
conscientiously believed that an act appropriating 
money was unconstitutional. He refused to pay and 
the writ of mandamus issued to compel him. 



46 

The court held that his duty was purely a minis- 
terial one, although under the Constitution itself, 
creating his office, he was to examine and adjust all 
claims upon the treasury. 

I read the syllabus and a part of the decision: 

"Constitutional Law: Legislative appropria- 
tions for expenses of County: Mandamus to Auditor. 
The legislature by an act duly passed and approved 
April 5, 1892, appropriated ' the sum of $7,495.73 
for the relief of Scotts Bluff County, and to reimburse 
said county for the expenses incurred in the trial of 
one George S. Arnold upon the charge of murder.' 
In a mandamus proceeding in this court to compel 
the auditor to draw his warrant in favor of the treas- 
urer of Scotts Bluff County for the amount appropri- 
ated, held (i; that the act was not in conflict with 
either the letter or spirit of the Constitution,( 2 ) that 
the appropriation of this money w^as in the nature 
of a donation, and that no inquiry or objection is ad- 
missable on the part of the auditor as to whether the 
appropriation was just, whether it was bestowed upon 
an undeserving recipient, or wdiat motives influenced 
the legislature to make it; (3) that the only duty left 
for the auditor in the premises was a ministerial one, 
and that he had no authority to supervise the action 
of the legislature by an inquiry into the actual ex- 
penditures of the county in the prosecution of 
Arnold.'' 

I now read. from the answer of the respondent, who 
held the high office of State Auditor of Accounts, to 
show that his defense was that the law was unconsti- 
tutional and therefore no law. Like you, Mr. Comp- 
troller, he was usurping the power lodged in the 
Supreme Court only. 

"And this respondent further says that under the 
provisions of the Constitution and laws of the State 
of Nebraska, the Auditor of Public Accounts has 
authority to examine and adjust all claim against the 
State when presented to him, and to refuse to pay 



47 

the same, wlieii, in his opinion, the same are illegal 
or unjnst. And this respondent alleges that he found 
said claim for said Scotts Bluff County unjust and 
illegal; that the act making the appropriation is 
contrary to the letter and spirit of the Constitution of 
the State of Nebraska; that said county of Scotts 
Bluff was put to some expense by reason of said trial, 
but the amount thereof this respondent alleges, upon 
information and belief, was a much less sum than 
the sum alleged to have been appropriated by the 
legislature." 

The court, after full presentation, gave its opin- 
ion. The part I now read gives the duty of the State 
Auditor, as given in the Constitution of Nebraska, 
to audit and adjust all accounts and then points out 
the duty of the oflficial to obey the law and not 
destroy it. 

"Section 9, article 9, of the Constitution, pro- 
vides: 'The Legislature shall provide by law that 
all claims upon the Treasury shall be examined and 
adjusted by the Auditor, and approved by the vSec- 
retary of State, before any warrant for the amount 
allowed shall be drawn; Provided, That a party 
aggrieved by the decision of the Auditor and Secre- 
tary of State may appeal to the District Court.' 
Now, what is meant in this constitutional provi- 
sion by ' claims upon the treasury ' which the 
Auditor must examine and adjust? We take it that 
it means claims which the State is or may be under 
legal obligation to pay, such as the salaries of its 
officers and employes, the costs of erecting build- 
ings, the expense attendant upon the maintenance 
of its prisons, asylums, schools and other institu- 
tions. We do not think the appropriation of the 
specific sum by the Legislature to a particularly 
named person as a donation, gift or a reward, and 
for which the State was under no legal obligation, 
comes within the claims which the Auditor must 
examine and adjust. True, he is placed in his 
position as agent of the State to protect the Treasury 



48 

against demands not lawfnlly dne and payable by 
the State; and when a claim is presented he must 
ascertain whether or not there is authority of law 
for its payment, and if he finds such authority that 
should satisfy him. If the Legislature has, by ex- 
press enactment, directed that a certain sum shall be 
paid to a person, and appropriated the money 
for such payment, the Auditor's duty in the premises 
becomes then merely ministerial. The power con- 
ferred upon him is not to supervise the action of 
the State, when, by its Legislature, it has admitted 
and acknowledged the claim and ordered it to be paid. 
Where the claim is not admitted by the State, then 
he stands in behalf of the State, and as its agent it 
is his duty to determine whether or not it is ad- 
missible, and justly and legally due; but when his 
principal, the State, whose officer he is, acknowl- 
edges the claim and directs it to be paid, then, inas- 
much as the State's regulation for the payment of 
money requires him to draw warrants upon the 
treasury before such money can be paid, his duty is^ 
without questioning, to conform to such direction. 
Finding the law for its payment to exist, he must 
regard that as plenary evidence that it is justly due. 
He cannot properly question the authority of an act 
of legislation directing the payment of money by the 
State, or disregard its authority, however fully he 
may be convinced that the money is bestowed upon 
an undeserving recipient." 

The court makes it clear that the duty is to pay 
when the legislature has appropriated the money for 
the payment. 

The court proceeds, speaking of the contention of 
the x\uditor that he can supervise the action of the 
legislature and annul its actions on the ground of 
unconstitutionality. 

"Such can not be the law. If it is, then instead 
of a Government of three co-ordinate departments, 
the legislative is subordinate to the executive depart- 
ment. The Auditor is an able and conscientious 



49 

officer and deserving of the highest commendation 
for the jealous care with which he guards the pu])lic 
treasury, and he acts wisely in shielding himself 
from liability by the decisions of the courts in cases 
where he is in doubt; but in the case at bar he may 
not only legally draw the warrant demanded by the 
relator, but it is his duty to do so. He has no dis- 
cretion in the premises. The demurrer to the return 
is sustained, and the writ will issue as prayed." 

I might take up your time with numerous other 
modern authorities but must leave most of them to 
my associates. I desire, however, to return again 
to the wisdom of the fathers to show how they under- 
stood the Constitution in the early days. James 
Madiso7t in a letter to General Armstrong, dated 
October 8, 1813, sets forth clearly the difference 
between Congress and the Executive Department; 
that the first is under no control save justice and 
policy and that the latter is controlled by the law. 

"It is a ground for proceeding in Congress, who 
are under no control but that of justice and policy, 
but must be otherwise regarded by the Department 
(Executive) which is controlled by the legal state of 
things." 

Again, President Madison says in a letter to his 
Secretary of War, dated July 6, 1814, speaking of 
the matter of the countersignature of warrants by the 
accounting officer of the Treasury Department. 

"Nothing is perceived in law or usage favoring 
the idea that the countersignature of the accountant 
is more than a form of verifying the authenticity of 
the warrants." 

It is no more to-day under existing law than it 
was then. 



i 



50 



'\\.\ rXCONSTlTUTIONAL LAW IS NO LAW." 

The constant urging upon you by those who, for 
political or other purposes, seek to hold up the pay- 
ment of this bounty is ''if the law is unconstitu- 
tional then it is no law and if in your judgment it is 
no law, being unconstitutional, it is not binding 
upon you and in good conscience you cannot obey it." 

A specious but most dangerous suggestion, hav- 
ing no basis in sound reason or good judgment and 
subsersive of the Government itself. 

All laws of Congress are binding upon all citizens 
until declared unconstitutional by the highest judi- 
cial tribunal. The citizen disobeys them at his peril. 
A law declared to be unconstitutional by any judicial 
tribunal below the Supreme Court of the United 
States is still the law and is inoperative or held in 
abeyance only as to the parties in the suit pending. 
It is destroyed and becomes a nullity as to all citi- 
zens, and particularly as to executive officials of all 
grades, only when the Supreme Court of the United 
States has declared it to be in violation of the Con- 
stitution of the United States. That high court 
will so decide only when the question is fairly pre- 
sented to it and is essential to the decision of the 
cause. It will not indulge itself in dictum and in 
the airing of its political views as the inferior Court 
of Appeals for this district did in the Miles case. 

It may be your individual opinion that bounties 
are unconstitutional, either under the general well- 
fare clause or that permitting the regulation of 
commerce. You may stand alone in that view. 
Are you therefore to nulliiy the law? Great States 
have at times tried it without success. Are you 
grciter than a sovereign State? If the position 
claimed for you is ttnable, then the citizen filling 



51 

yuiir chair is greater than the Chief Kxecutive, 
superior to tlie Supreme Court aud more powerful 
thau a sovereign State. 

Your proposed act is iiullificatiou with a vengeance. 
South Carolina, acting as a sovereign State, tried 
on nullification of a law of Congress during Andrew 
Jackson's term, but "Old Hickory" put his foot 
down upon it. It declared that no protective duties 
could be laid under the Constitution and the impost 
duty laws "being unconstitutional were no laws." 
How like this incident was that— except that for 
South Carolina we are to insert the Comptroller of 
the Treasury— a federal officer created by Congress 
and appointed by the President, the Senate concur- 
ring, to execute the law. Execution does not mean 
destruction. Enforcement does not mean nullifica- 
tion. The doctrine of nullification is one that no 
political party has ever dared to set up since Jackson 
gave it its quietus in 1832. Is it to be revived in 
These democratic days? It is a monstrous doctrine 
whether advanced by a State, a party or an individ- 
ual. When brought forth by an executive officer 
sworn to obey and enforce the laws it is a monstros- 
ity that should be strangled at birth. 

In the days of the attempted nullification in South 
Carolina the President's proclamation, warning all 
men to obey the law, notwithstanding they believed 
it unconstitutional, stands out like a beacon light. 
Let his words warn you from shipwreck on the rocks 
of nullification. 

Let us look at this historical parallel. 
Congress passed the tarifi^ law of 1832 which South 
Carolina and several other States believed and de- 
clared w^as "unconstitutional." No court had so 
decided, but by virtue of the power which certain 
southern States supposed they had l^ecause of the 



52 

location of custom houses in their borders and 
because of the supposed public sentiment there, it 
was proposed to presume the act of 1832 "unconsti- 
tutional." Although it was a law, yet it was assumed 
to be no law because "unconstitutional." They 
occupied the precise position that the Comptroller 
does; and what did President Jackson say or do? 
Did he support that theory? Did he assume to say 
to the nullifiers of South Carolina, "a law is no law 
because you believe it unconstitutional!" On the 
contrary he proceeded to execute the laiv as he found 
it. It was a law, presumptively constitutional. It 
was for the courts to decide otherwise. He sug- 
gested the "Force bill" which was enacted to give 
him fuller power to execute the law as against 
nullifiers! That was sound democracy, sound policy, 
sound law and the only action consistent with a 
republican form of government. The other theory 
means anarchy. In his message to Congress, July 
16, 1833, President Jackson said: 

"Upon the power of Congress, the veto of the 
Executive and the authority of the Judiciary which 
is to extend to all cases in law and equity arising- 
under the Constitution, and laws of the United 
States made in pursuance thereof, are the obvious 
checks, and the sound action of public opinion, 
with the ultimate power of amendment are the 
salutary and only limitations upon the powers of 
the whole." 

And again: 

" However it may be alleged that a violation of 
the compact, by the measures of the Government, 
can affect the obligations of the parties, it cannot 
even be predicated of those measures until all the 
constitutional remedies shall have been fully tried. 
If the Federal Government exercise powers not 



53 

warranted by the Constitution, and immediately 
affecting individuals, it will scarcely be denied 
that the proper remedy is a recourse to the judi- 
ciary. Such undoubtedly, is the remedy for those 
who deem the acts of Congress, laying duties and 
imposts, unconstitutional. ' ' 

And on the point of a State, the Government or a 
person being affected beyond the reach of judicial 
power, as is suggested here the Government now is. 
President Jackson said: "The remedy in that case 
consists in appeals to the people, either to effect a 
change in the representation or to procure relief by 
an amendment to the Constitution. But the meas- 
ures of the Government are to be recognized as 
valid and consequently supreme until these remedies 
shall have been effectually tried." 

The nullification threatened here is on a smaller 
scale, but it is none the less dangerous, revolutionary 
and pernicious. Surely the successor of Andrew 
Jackson will not give it his countenance but will 
again drive nullification under cover. 

It is lamentable that hundreds should be driven 
into financial ruin, that the future of great States 
should be put in jeopardy and that a valuable in- 
dustry worth hundreds of millions to the Republic 
should be destroyed; but all that is nothing to the 
dangerous precedent of nullification of a law of Con- 
gress here attempted. 

The power does not exist in the executive either 
to nullify or suspend a law. In the convention that 
framed the Constitution there was much debate over 
the proposition of an absolute negative by the Presi- 
dent. It was beaten by a vote of ten of the States. 
Mr. Butler then moved — 

"Resolved, That the National Executive have the 
power to suspend any legislative act for the term 
of ." 



Dr. Franklin in speech supported it. 

Mr. Gerry thought it mischievous as an absolute 
veto. 

All of the thirteen States voted against it. 

And yet we are met with the proposition that an 
executive officer, sworn to faithfully execute and 
enforce the laws, proposes not only to suspend but 
to annul. 

A few more extracts from Andrew Jackson's 
trenchant pen and I will leave this branch of the 
subject. I quote from his proclamation of Decem- 
ber lo, 1832, calling upon his fellow-citizens to obey 
the law, even if unconstitutional in their individual 
or official opinion: 

''It is no answer to repeat that an unconstitutional 
law is no law, so long as the question of its legality 
is to be decided by the State itself; for every law 
operating injuriously upon any local interest will be 
perhaps thought and certainly represented as uncon- 
stitutional, and, as has been shown, there is no 
appeal." 

"If this doctrine had been established at an earlier 
day, the Union would have been destroyed in its 
infancv. ■ ' 

He further says that the power to annul a law is 
"incompatible with the existence of the Union, con- 
tradicted expressly by the letter of the Constitution, 
unauthorized by its spirit, inconsistent with every 
principle on which it was founded and destructive 
of the object for which it was formed." 

Again he says: 

"There are two appeals from an unconstitutional 
act, by Congress — one to the judiciary, the other to 
the people and the States." 

He winds up this great proclamation by this stir- 
ring appeal: 

"Fellow citizens! The momentous case is before 
you. On your undivided support of your Govern- 



mcnt depends the decision of the great question it 
involves, whether your sacred Union will be pre- 
served and the blessings it secures to us as one 
people, shall be perpetuated." 

I hope, Air. Comptroller, you will go to these 
fountain heads for guidance, for they will lead you 
to know that prompt obedience to the law is the 
highest duty of an executive officer. 

I now give you late executive and departmental 
authority, coming from such sources as to compel 
respect. Great lawyers only should be and are 
usually called to the head of the Department of the 
Interior. No better' lawyer lives than Secretary, 
now Senator, Henry M. Teller; Secretary Lamar 
closed his eventful life, so full of honors, on the 
Supreme bench and Secretary Hoke Smith still is at 
the head of the Interior Department. Hear what 
they say. 

Secretary Teller, x^pril 21, 1876, ist Decisions 
Department of the Interior relating to Public Lands, 
Vol. I, page 335: 

"It is no part of my duty to here discuss the con- 
stitutionality of the act of 1876, nor the questions 
which may arise as to conflict of title by reason of its 
having a place on the statute books. Those are 
questions for the Court. My plain duty is to 
execute the laws under which I am called upon to 
act, in accordance with their letter and spirit as I 
find them." 

Secretary Lamar, August 20, 1886, Vol. 5-91: 
"What the statute confers the statute means to be 
enjoyed. What the statute directs it means to have 
done. Not to do it, or even to delay unnecessarily 
in doing it, is to violate the statutes and involves a 
grave deriiection of duty." 

Secretary Smith, June 22, 1893, Vol. 16, page 

553- 



56 

''The duty of this department is to administer the 
laws as they are found in the statute books and not 
to determine whether they are in violation of the 
Constitution, or of treaties with foreign nations." 

Are you to override such opinions as these ex- 
pressed by such men. You wull certainly hesitate 
before doing so and I firmly believe will decline 
being led into such new and dangerous paths. 

In the great press of matters that has been lately 
upon me I was pleased to receive yesterday a brief 
prepared by Mr. Ham, formerly my secretary when 
I was in the Senate. I read a brief extract from it, 
expressing my sense of obligation to him for his aid 
and assistance: 

'' A proper construction of the Constitution is that 
if the executive branch desires to raise the issue of 
constitutionality of a bill with the legislative branch, 
the Constitution provides a way, to wit: by veto. 
The legislative branch may then recede, or it may 
join issue and test the question by an effort to secure 
a two-third vote in either branch. But if the Execu- 
tive sign the bill it becomes a law, the constitution- 
ality of which neither branch may raise against the 
other. It has become the act of the law-making 
power, legislative and executive. Citizens may raise 
the question, but for the executive branch to do so 
after it has exhausted its power as against the legis- 
lative branch, would be ridiculous. The Executive 
was a partner in enacting the law. It could not be- 
come a law without positive executive sanction or 
neglect to sign, both methods being allowed the 
Executive to express approval. When the Executive 
has acted by signing or by allowing it to take effect 
without the Executive signature, it is a law until set 
aside by a court, and the judiciary then is the only 
agency which can be employed to test the issue of its 



57 

constitutionality. This must be so, otherwise we 
would have the spectacle presented of every inferior 
officer under the Government seeking to overrule 
the Congress, and the Executive as well. Claimants 
here stand in the shoes of Congress, and the execu- 
tive head of the nation. Both have jDronounced the 
statute under which the claims are made a law. It 
is suggested that it is not the province of an executive 
officer to overrule that action." 

I submit that these propositions are fairly put and 
carry conviction. 

THE BOUNTY CLAIMS AN EQUITABLE COMPROMISE. 

These are not ordinary claims. Congress in the 
exercise of its equity powers, for that it has equitable 
powers is fully recognized by every authority, has 
passed on the fundamental question. Now what was 
the fundamental question? What lay at the bottom 
of this last legislation? Recognizing this contract 
right in the sugar producers, abrogated by Congress, 
under what I think was a violent and unjust assump- 
tion of power, it said "We will compromise with 
these people and give them that to which they are 
fairly entitled, viz: the entire bounty earned before 
the repeal of the act, or from the ist of July to the 
28th day of August, 1894, and eight-tenths of a cent 
for the crop of 1894, because in that year they were 
proceeding under the sanction and by the authority 
of the Government of the United States by virtue of 
a license issued out of the Treasury Department on 
the ist day of July of that year, and running for the 
fiscal year." It has passed, then, upon the funda- 
mental question, decreed the constitutionality of 
bounties and has ordered and directed the officers of 
the Treasury to ignore all questions except as to the 



5'S 

amount of suo^ar produced, whether produced in 
compliance with the law and regulations, and the 
saccharine strength of the sugar. 

Tlie law of March 2, 1895, provides: 

'' That there shall be paid by the Secretary of the 
Treasury to those producers and manufacturers of 
sugar in the United States from maple sap, beets, 
sorghum or sugar cane grown or produced within the 
United States, who complied with the provisions of 
the bounty law as contained in Schedule K of the 
tariff act of October first, eighteen hundred and 
ninety, a bounty of two cents a pound on all sugars 
testing not less than ninety degrees by the polar- 
iscope, and one and three-forths cents a pound on all 
sugars testing less than ninety and not less than 
eighty degrees by the polariscope, manufactured and 
produced by them previous to the twenty-eighth day 
of August, eigliteen hundred and ninety-four, and 
upon which no bounty has previously been paid; and 
for this purpose the sum of two hundred and thirty- 
eighty thousand two hundred and eighty-nine dollars 
and eight cents is hereby appropriated, or so much 
thereof as may be necessary. 

"That there shall be paid to those producers who 
complied with the provisions of the bounty law as 
contained in Schedule E of the tariff act of October 
first, eighteen hundred and ninety, by filing the 
notice, application for license and bond therein re- 
quired prior to July first, eighteen hundred and 
ninety-four, and who would have been entitled to 
receive a license as provided for in said act, a bounty 
of eight-tenths of a cent per pound on the sugars 
actually manufactured and produced in the United 
States testing not less than eighty degrees by the 
polariscope, from beets, sorghum or sugar cane grown 
or produced within the United vStates during that 
part of the fiscal year ending June thirtieth, eighteen 
hundred and ninety-five, comprised in the period 
commencing August twenty-eighth, eighteen hun- 
dred and and ninety-four, and ending June thirtieth, 
eighteen hundred and ninety-five, both days inclu- 



59 

sive; and for this purpose the suin of five million dol- 
lars, or so niiich thereof as may be necessary, is 
hereby appropriated; Provided^ That no bounty shall 
be paid to any person engaged in refining sugars 
which have been imported into the United States, or 
produced in the United States, upon whicli the 
bounty herein provided has already been paid or ap- 
plied for. 

''The bounty herein authorized to be paid shall be 
paid upon the presentation of such proof of manufac- 
ture and production as shall be required in each case 
by the Commissioner of Internal Revenue, with the 
approval of the Secretary of the Treasury, and under 
such rules and regulations as shall be prescribed by 
the Commissioner of Internal Revenue, with the ap- 
proval of the Secretary of the Treasury. 

"And for the payment of such bounty the Secretary 
of the Treasury is authorized to draw warrants on 
the Treasurer of the United States for sums as shall 
be necessary, which sums shall be certified to him by 
the Commissioner of Internal Revenue, by whom the 
bounty shall be disbursed, and no bounty shall be 
allowed or paid to any person as aforesaid upon any 
quantity of sugar less than five hundred pounds." 

For the examination of claims and returning the 
amounts due the Commissioner of Internal Revenue 
is authorized to employ two internal revenue agents. 
Any person guilty of a fraud is to be fined and im- 
prisoned. 

This is the law under which Ave should be acting 
but apparently are not. 

Now, Your Honor, the law wall, I hope, be very 
fully commented upon by some of my associates, be- 
cause I feel I am taking more time than I should. 
We present it to yon, dated as it is after the Dockery 
act, passing as it did on the 2nd day of March, 1895, 
as a later law than that defining your duties, as a spe- 
cific law providing, in this compromise of the con- 
tract, the method by which the bounty shall be 



6o 

ascertained, the authority which shall pass upon the 
steps that shall lead up to the warrant, and the party 
by whom the money shall be disbursed from the 
Treasury of the United States. I simply read it. I 
do not propose to take the time to comment upon it, 
but I think it will be evident to you, upon hearing 
the full argument on the question, that as I have 
said, this is no ordinary claim, but it is one where 
Congress, in the exercise of its equitable power and 
its constitutional power, has said that the books are 
closed except as to the examination of this detail, 
and has pointed out the officials upon whom the re- 
sponsibility rests to investigate and to pay. I sub- 
mit to you that under this law you have no power or 
authority. Did Congress have powder to pass such a 
measure? 

Mr. Caffery. Will you allow me to ask a 
question right here? I wish to know, as a mere 
matter of political inquiry, whether or not your 
associates and colleagues on your side of the cham- 
ber, belonging to your political faith 

Mr. Manderson. You are entering on very 
dangerous ground. 

Mr. Caffery. Exactly. I wish to know 
whether you and your associates did not vote for 
this modicum of bounty as contained in the act of 
March 2, 1895, ^^ ^ measure of relief and as an 
equitable compensation to the planters instead of 
establishing any bounty principle? 

Mr. Manderson. Beyond any question their 
effort was to get all they could. They got as much 
as they could in the compromise. They should 
have had very much more. The eight-tenths of a 
cent bount\ , which is the compromise for the sugar 
produced in 1894, was all that could be obtained be- 
cause of disturbance and conflicts, to which I need 



6 1 



not refer, for I would not unfold the secrets of the 
dread charnal house. It was th.^ best we could get. 
But of course it was an equitable, or an attempt at an 
equitable adjustment of this matter — falling far short 
of equity — to save those people from destruction 
and disaster most dire. The principle of giving 
bounty had been long established and acquiesced in. 
Now, did Congress have the power? There i? a 
celebrated old case known as the Carmick-Ramsey 
case, with which many have familiarity, and I shall 
not do more than read one or two extracts from the 
report of the select committee. It is found in 
*'Rep. Com. No. 270, 36th Cong., ist Session.'^ 
It was claimed in the act of Congress that 
Carmick and Ramsey had a contract for the car- 
riage of the mails which was abrogated by 
the Postmaster General, and the First Comptroller 
of the Treasury was required to adjust the dam- 
ages due to them in law, equity and justice. 
There was a good deal of trouble over the matter. 
I hold here the report made by Senator Green. He 
says the law — 

"Was mandatory and explicit. The only previ- 
ous constructive question connected with the sub- 
ject, namely, as to whether there was a contract and 
whether that contract had been abrogated, Congress 
determined and decided for itself in the act afore- 
said. Congress decided that there was a contract, 
and that it had been abrogated by the Postmaster 
General, and that the injured parties were entitled 
to damages, and Congress appointed the First Comp- 
troller alone for the specific purpose to ascertain 
the damages, and to render his award, that the 
amount might be paid.'' 

Now the question in dispute was whether the First 
Comptroller in the exercise of his power could not 
only pass upon the amount involved, but could go 



62 

back and investio^ate the question whether the con- 
tract had been abrogated. That was the contention, 
and it ran through many a year and assumed many 
phases. I turn, however, to the report to read an 
extract from a letter from a man known to fame, by 
the name of Reverdy Johnson, commencing on page 
5 of this report. He says: 

" Suppose, then, you should decide that there were 
no damages because the contract was not abrogated; 
is the act of Congress obeyed? Of course not; 
and that for the plain reason that Congress, in the 
act, have declared that it was abrogated, that there 
are damages to be assessed, and have merely con- 
fided the administrative duty of assessing them to 
you." 

Then he quotes from Attorney General Black as 
to whether the contract with them was valid and 
binding. It certainlv was, and Mr. Attornev General 
Black had so decided. It was so because it was 
made under sanction of an act of Congress, and 
therefore, as Judge Black says, was binding in all 
its parts, and Congress, when the facts were all 
before it, decided that by all the circumstances the 
contract was abrogated. 

Now I turn to another report for the purpose of 
ascertaining just what that noted man Jeremiah 
Black said, and I refer to it because in this letter 
that eminent man and great lawyer has announced 
a proposition which, while beyond question is strict 
law, is given to such extreme that at first it is shock- 
ing to one's sense of the power of Congress. 

"Undoubtedly Congress may order the money of 
the Treasury to be paid to a person who has no 
claim upon the Government as well as to a just 
creditor." 

He is right. That is a thing of every day occur- 
rence in Congress. As I have looked about me 



63 

sometimes and have seen those who were the recip- 
ients of money from the Treasnry, 1 have thought 
that the number of those, who, having no just claims, 
got money from the Government, exceeded the num- 
ber of those having righteous claims against the Gov- 
ernment who were paid. 

The Attorney General continues: 

"If Congress had chosen to say that Carmick and 
Ramsey should have half a million of dollars as a 
gracious gift, the Executive could not refuse to pay 
it, no matter how clear the proof might be that the 
law was unadvised and wrong. " 

That is rather an extreme statement, and yet I 
defy any lawyer to deny its truth. It is wdthin the 
power of Congress so to exact, exemplified and acted 
upon almost every day in Congressional experience. 

Mr. Black goes on: 

"A recital in such a law that the sum to be paid 
was intended as compensation for damages w^hich 
never occurred would not take away the right of the 
party to receive what was given. The legislative 
will, expressed in the constitutional form, is enough, 
without more, to avouch a legislative act. But here 
is a law w^hich does not give to the claimants any 
specified sum of money. The amount which they 
may lawfully demand is to be ascertained by the 
Comptroller. To enable him to do this, a standard 
or rule is furnished to him, and upon that he must 
base his calculation. He shall allow them the dam- 
ao^es due to them on account of the abrooratien of 
their contract." 

Mr. J. K. Dodge. Where is that letter? It is 
not in report No. 270. 

Mr. Manderson. No, you will find it in House 
Executive Document No. 30. 

Mr. Dodge. Accompanying the sume measure? 

Mr. Manderson. In another document on the 
same subject. 



64 

Mr. Dodge. Thirty-sixth Congress. 

Mr. Manderson. Thirty-fifth Congress, Second 
Session, House Executive Document No. 30. 

The Comptroller. Do you agree with the view 
to the full extent expressed there? 

Mr. Manderson. I do. I have seen it in opera- 
tion during my twelve years of Congressional life. I 
believe the Congress of the United States, under the 
powers conferred upon it by the Constitution, has the 
right, as Attorney General Black says, to make a 
donation or a gift to anybody without consideration, 
if it sees fit to do so. 

That is not this case, however. Here is no gratuity 
but a compromise of a just claim resting on legis- 
lative contract. 

The Comptroller. I understand. 

Mr. Manderson. The Carmick-Ramsey case is not 
this case, and I present that extreme view of Black 
as showing upon the question of constitutionality or 
the consideration of the question of constitutionality 
to what extent law officers and the courts have gone 
in regard to the powers of Congress. In the same 
document I find I have a reference to some statement 
made by Comptroller William Medill, in the same 
line. William Medill, the Comptroller, was a man 
of no mean repute; and he says as to the Carmick 
and Ramsey case: 

"It is not denied that Congress has full constitu- 
tional power to order the public money to be either 
paid away or given away at its pleasure; but its will 
So to do must be expressed in proper form." 

Of course "proper form" must be an enactment in 
proper form. 

"Nor will a bad reason or false object invalidate 
the gift any further than the rule holds good that 
where the reason of the law ceases the law itself 
ceases: 



65 

"Thus, Congress might enact a law reciting that, 
whereas I had a contract with the Governmant which 
had been violated, I should be considered as injured 
to that amount, and paid the sum of $10,000, the 
fact being that I never had had such a contract at all. 
Yet it was the will of Congress that I should have 
the $10,000, if so ordered, and the law gave the 
officers authority to pay me the money, notwith- 
standing the law gave a reason which did not exist 
for paying the same." 

That is going to a very great extent, because 
there would be, perhaps, the evidences or positive 
proof that Congress had been imposed upon or mis- 
taken. If it had allowed the $10,000 under a 
mistake of facts, or under a fraud perpetrated by the 
claimant, it might become the duty of some citizen 
to invoke the courts to prevent its payment. 

The Comptroller. Can a citizen do that? 

Mr. Manderson. If the citizen has any interest 
in the matter he can. 

The Comptroller. How does he get an in- 
terest. 

Mr. Manderson. He may get an interest as a 
taxpayer. 

The ComTroller. Can a taxpayer go into the 
the Federal courts and attack an appropriation? 

Mr. Manderson. He can if he is directly in- 
terested in it. 

The Comptroller. How is he directly inter- 
ested except as a taxpayer? 

Mr. Manderson. We will try to defeat him if 
he should make an effort in this particular case. 

The Comptroller. I guess you will defeat 
him. 

Mr. Manderson. I think we will. 

The Comptroller. I think so, too. You do 
not think he can go into court. You do not con- 
5 



66 

tend that a simple taxpayer can go into court and 
attack an appropriation? 

Mr. AIandersox. No, I do not think he can, 
unless he has a direct interest in the matter; but in 
the particular case supposed I think I could devise a 
plan by which the law could be defeated if it were 
based upon fraud. But I bring this case forward to 
show to you the extent to which one of your prede- 
cessors has gone. He says the $10,000 would have 
to be paid although Congress was mistaken and 
there never had been a contract and it was the 
merest donation. 

But I must hasten. I have devoted more time to 
the consideration of this question than I thought I 
should. I simply desire that you shall try the 
question as to the advisability, to draw it mildly, of 
your passing, upon the validity of statutes and their 
constitutionality, by some cases that may very 
readily be cited. Many other apt instances will 
naturally present themselves. 

Years ago the Government of the United States 
embarked in the Louisiana purchase, and agreed to 
pay $15,000,000 for the Louisiana territory. The 
Federalists of that d.iy, you will remember, declared 
that that was unconstitutional. The air was full of 
the proposition that there was no right in the 
Government of the L^nited States to acquire territory 
either through treaty or through law, by purchase 
and taking the money of the people for that purpose. 
That was the Federalist idea. Suppose we had had 
some Treasury official with that limited idea of the 
powers of this great Government at that time; what 
a spectacle for gods and men he would have pre- 
sented, and what a hissing and scorning through all 
time he would have received had he placed barriers 
of obstruction in the road and had he been able to 



67 

defeat the magnificent purchase of tliat vast empire 
which has made this country great and strong! And 
yet never was a question presented in the whole his- 
tory of the Republic that so bristles with argument 
as the question of the constitutionality of the use of 
the public money for the purpose of buying territory. 
Thank God, it was not decided in that way, and I 
hope we will go on conquering and to conquer, pur- 
chasing and to purchase until we get Hawaii and 
Cuba and other possessions to which some of us look 
with longing eyes. 

In 1861 a difficulty arose. Certain States at- 
tempted to secede from the Union. There were 
those, and they were by no means few, who said 
" you cannot coerce a sovereign State. It is uncon- 
stitutional to attempt to preserve the Union and 
keep those States within the bounds of this mere 
Union of States, not a nation." There are not any 
of us \vho lived in that day whose brains were not 
puzzled over the question. I, a young fellow at the 
time, came here to see Lincoln's first inauguration. 
I stopped at what was then Brown's Hotel, now the 
Metropolitan, and I stood around, boy as I was, 
listening to the conversation of excited men. It 
was the all-absorbing question. The constitution- 
ality of the effort on the part of the Government of 
the United States to bring back the seceding States 
was debated in every bar-room. It was the ac- 
companiment of every drink, and the subject of 
talk on every street corner. 

I remember going from here over to Philadelphia, 
and I met there a colored man, black as the ace of 
spades, a glib talker and a very bright fellow. I shall 
never forget the way he put it. He said to me, "you, 
sir, have been over to Washington. Did you hear 
anything about whether we can prevent those States 



68 



from seceding? " '' Oh," I said, " I have heard a 
great deal both ways, and I do not know anything 
about it. Upon the constitutional question I am 
uninformed." I said: " How does it strike you? " 
"Now, sir," he said, "it seems to me about like 
this: Suppose you and I were out here in the Dela- 
ware River, in a boat so constructed that if one of 
us should get out of the boat the other would drown. 
You would have the undoubted right to jump out of 
the boat, but can there be any question of my 
right to hold you there and save my life? '^ 
[Laughter.] I never heard the question bet- 
ter put than it was put by that darkey. But 
the constitutionality of the act was denied. It 
was said that it was unconstitutional to raise and 
pay armies, to construct a navy in order to 
maintain the flag and save the nation. What a pit- 
eous spectacle in history would be given by any 
Comptroller of the Treasury who should have said 
when the appropriation acts came in to maintain the 
war, to pay and equip those immense armies, run- 
ning into an expenditure of millions daily, "Oh, 
well; this is all very well; the result is desirable; 
it might be well to save this nation, but, then, we 
can not constitutionally, and I really must refuse to 
countersign these warrants." I think there would 
have been a rape of the Treasury and a murder of 
the Comptroller before he got very far along with 
his constitutional doubts and hesitations. 

The Comptroller. There would probably have 
been an official execution. [Laughter.] 

Mr. Manderson. Probably, and deservedly. 
So I might run on and show the numerous fiascoes, 
the dreadful disasters which might come from the 
enforcement of the doctrine that an executive offi- 
cial, in the performance of duties, quasi-judicial and 



i^^ji^r.^:>its^js£i 



69 

ministerial, such as appertain to you in the passing 
of claims upon the Treasury, shall so extend his 
quasi-judicial power or right as to permit him to 
nullify, to destroy, to kill so sacred a thing as a law 
passed by the Congress of the United States, and 
approved by the Chief Executive. 

The case of Kendall vs. United States, reported in 
1 2th Peters, was almost the counterpart of that of 
the Carmick-Ramsey case. Claimants had a con- 
tract to carry the mails, and certain allowances of 
credits made thereon by one Postmaster General were 
stricken out by his successor, and the sums withheld. 
Plaintiffs appealed to Congress, which passed the 
act of July 2, 1836, "authorizing and directing the 
Solicitor of the Treasury to settle and adjust the 
claims, to inquire into and determine their equity 
and make such allowance as may seem right," with 
directory provisions to the Solicitor in certain respects 
not material here. The act then proceeded as follows: 

"And the Postmaster General be and he is hereby 
directed to credit the claimants with the sums found 
due," which the Postmaster General refused to do, 
giving as a reason, that the Solicitor of the Treasury 
in his award had exceeded the power given him by 
the act of Congress. In other words, he interpreted 
the act of Congress devolving the power on the 
Solicitor, and because he differed with the Solicitor, 
he refused to "credit," for payment as the act of 
Congress directed. Thereupon the claimants went 
to Congress and the Senate Judiciary Committee 
made a report. (No. 88, 24th Cong., 2nd Session.) 
The committee held that if Congress had intended to 
revise the decision of the Solicitor, the Postmaster 
General w^ould not have been directed "to credit" 
without the intervention of the further action of 
Congress and the committee recommended the adop- 
tion of this resolution: 



70 

"That the Postmaster General is fully warranted 
in paying and ought to pay the full amount of the 
award . ' ' 

The Postmaster General still refused to "credit'^ 
under the award or decision, and Congress (p. 533, 
12 Peters), believing that it had passed sufficient 
legislation to meet the case, refused to enact further, 
whereupon the plaintiffs asked that mandamus issue 
on behalf of the United States against the Postmaster 
General. Held, that mandamus would lie. The 
Court (p. 610) said: 

"The mandamus does not seek to direct or control 
the Postmaster General in the discharge of any official 
duty, but to enforce the performance of a mere min- 
isterial act, which neither he nor the President had 
any authority to deny or control. It would be an 
alarming doctrine that Congress cannot impose upon 
any executive officer any duty it may think proper." 

It goes without saying that the duty required to be 
performed must not violate the Constitution, but 
whoever heard that it was the province of the ordi- 
nary accounting officers of the Government to assume 
that a law is unconstitutional in order to escape per- 
formance? No question of that sort was involved in 
12 Peters, and so the Postmaster General sought to 
shield himself behind the power of the executive. 
But the Court said, that was a doctrine that could not 
"receive the sanction of the Court." It would be 
clothing the President with a power to entirely con- 
trol the legislation of Congress and paralyze the ad- 
ministration of justice. To contend that the obliga- 
tion imposed on the President "to see the laws 
faithfully executed, implies a power to forbid their 
execution, is a novel construction of the Constitution 
and entirely inadmissible." And again: "The 
Postmaster General was simply required to give the 



71 

'credit.'" There was no room for the exercise of 
any discretion, official or otherwise. "All that was 
shut out by the positive and direct command of the 
law." [i2 Peters, p. 614-626.] 

It was the direction to "credit" after the finding 
that made the duty purely ministerial; which ab- 
solved the Postmaster General of all discretion. So 
here, practically. The finding of fact has been made 
and we have reached the stage of payment. That 
Congress undertook to control by making the act 
mandatory. The amount, of course, was necessarily 
left in abeyance. 

I am fully prepared to argue to you as a fellow- 
citizen and as a brother lawyer the question of the 
constitutionality of the bounty act. I heard it sug- 
gested, perhaps by my associates, that you desired 
some argument upon the question. 

The Comptroller. In view of the decision in 
the Miles case. 

Mr. Manderson. You desire an argument based 
upon that case? 

The Comptroller. Yes, sir. 

Mr. Manderson. I have already adressed my- 
self to that question at considerable length in the 
Senate of the United States and would be pleased tO' 
submit to your consideration that speech, of which I 
have some copies. I am ready to argue the question 
of the constitutionality of bounties addressing myself 
to you as a fellow citizen. 

The Comptroller. Pardon me, Senator, but 
would you like for us to take a recess now? 

Mr. MandeRvSOn. I should greatly prefer to do 
so, as I have found it exceedingly warm. 

The Comptroller. There are one or two ques- 
tions I desire to ask you, but I will do so hereafter. 

At one o'clock a recess was taken until two o'clock. 



72 

At the expiration of the recess, Mr. Manderson 
resumed his argument. 



THE CONSTITUTIONALITY OF BOUNTIES GIVEN FOR 
PUBLIC PURPOSES, SHOWN BY INTERPRETATIONS 
OF THE CONSTITUTION, BY USAGE AND BY LAW. 

Mr. Manderson. If your Honor please, I sug- 
gested before the recess the reasons for my firm con- 
viction that the question of the constitutionality of 
law is not one for the consideration of an executive 
officer, and now in such mild manner and quiet way 
as I may in this intense heat I shall try to present 
the reasons convincing me and that have heretofore 
found expression by my vote and voice why this 
bounty law, and any law granting a bounty, which 
means an apportionment of some part of the public 
funds to a private individual, is entirely constitu- 
tional, where it is for a public purpose. And the 
only judge of what is a public purpose, certainly the 
only judge as between the legislative and the execu- 
tive branches of the Government, is the Congress of 
the United States and, in States, the legislature of 
States. 

Now, fully honoring and inclined not only to honor, 
but to exalt the eminent position that you fill with 
such ability and grace, I connot refrain from the 
suggestion that what I may say to you upon this 
subject is addressed to you rather in your capacity 
as a citizen and as a brother lawyer than in your capac- 
ity as Comptroller, for with this question you have 
officially nothing to do. 

I would reason with you by the way. If there is 
in your mind that disturbance which prompts you as 
an individual rather than an official not to believe in 
the principle of protection, I would present the argu- 



72> 

meiils that lie at the base of that American system 
of wliich you aud I have heard much from stump 
speakers and in comments upon which we have in 
public places ourselves occasionally indulged. If the 
principle of protection is right, if it is one that can 
be found under the powers granted to Congress either 
to regulate commerce or because of the general welfare 
clause of the Constitution, than I suggest to you that 
there is no argument which advances itself to the con- 
sideration of that question and leads to the conclu- 
sion that protection by impost duty is right which 
does not just as logically, just as irresistably and with 
just as much persuasive and compelling force lead to 
the proposition that bounties can be paid for encour- 
agement of American industries. It goes without 
saying that they should be for a public purpose. It 
is a matter of comparatively late date that the 
doctrine of protection has been thus attacked. 
Those who framed the sacred instrument, that lies 
at the foundation of our institutions, had no 
questionings in their minds as to the right of 
protection to home industries; their inauguration 
by a system of protection, their cultivation and 
growth by a system of protection and their maintenance 
by a system of protection, whether that protection 
came from impost duty or by bounty. The fine 
drawn distinction of the later day, which advocated 
protection that was incidental and not purposely 
placed as distinct from protection for protection sake, 
did not obtain in the early history of the Republic. 
By quotations ample, liberal, from the great minds 
of the early day, whether they were representing the 
views of Jefferson, on the one side, or of Hamilton, 
on the other, I think I can fully establish the fact 
that, in the minds of many, bounties were considered 
preferable to that more indirect protection that came 



74 

by impost duty. I ma}- be pardoned if I refer for 
these quotations to that which ought to impart abso- 
hite verity, because it was a speech that I made a 
year ago in the Senate. I there, on the ist day of 
June, 1894, in consideration of the questions that 
arose during the pendency of the Wilson bill, made 
certain remarks that I have before me. I have no 
idea your Honor has ever given me the benefit of 
having read this too lengthy speech. I propose to 
leave it with you for your prayerful consideration, 
in the hopes that its cogent reasoning and amplitude 
of truth wall lead you to the proper political faith 
and that you will be found upon this great question, 
as you are on many other great questions, entirely 
right before you get through with its reading. 
[Laughter.] 

Let us look first at the legislation proposed in the 
early Congresses. I need not refer you to that first 
act after the adoption of the Constitution which was 
for the protection and encouragement of American 
manufactures. Never in those early Congresses was 
the proposition of protection and encouragement by 
either impost duty or bounty submitted that it did 
not find advocates of all political complexions, and 
whenever the matter came to vote, the principle 
received majorities that fully vindicated the opinion 
of those who helped frame the instrument and were 
living when it became the foundation stone of this 
Republic. The instances are numerous and I will 
give a few. 

In April, 1879, a bill was before Congress for con- 
sideration in which there was a proposition to put a 
duty on all unwrought steel that should be imported. 
Now I quote from the record: 

"Mr. Lee moved to strike out this last article, 
observing that the consumption of steel was very 



75 

great, and essentially necessary to a<^riciiltiiral im- 
provements. He did not believe any gentleman 
would contend that enough of this article to answer 
consumption could be fabricated in any part of the 
Union; hence it would operate as an oppressive, 
though indirect tax upon agriculture, and any tax, 
whether direct or indirect, upon this interest, at this 
juncture, would be unwise and impolitic." 

No question there of right, but a question of policy; 
and history repeats itself. In this day, with our 
enormous production of iron and steel, with a pro- 
duction so great as to largely supply all the demands 
of this country and permit exportation as well, it 
sounds very strange to read the proposition advanced 
by Mr. Lee that it would be impossible for this coun- 
try to answer by production the demand for consump- 
tion; just as we have those to-day, unfamiliar with 
the subject of sugar, who have grave doubts as to the 
ability of this country to produce all the sugar that 
it needs. The saccharine principle prevades all 
nature. Sugar can be extracted from almost every- 
thing. I remember that my old professor of chem- 
istry at school used to say to us that it was so generally 
prevalent that he could take the shirts off the backs 
of the young men who composed his class and extract 
sugar from them; and the dirtier they were probably 
the more sugar. [Laughter.] And so it is. There 
is no principle of nature that is so all extensive 
as the saccharine principle, and those of us who 
have explored the matter know to-day that under 
proper safeguards and fair protection it is entirely 
possible for this country to save itself the many, 
many millions which it expends for foreign sugar by 
producing it at home. But let us see what was said 
in the First Congress about iron and steel. 

Mr. Tucker entered the debate and 



76 

"Joined the gentleman in his opinion, observing 
that it was impossible for some States to get it but 
by importation from foreign countries. He con- 
ceived it more deserving a bounty to increase the 
quantity, than an impost which would lessen the 
consumption and make it dearer also." 

Mr. Clymer, of Pennsylvania, came into the de- 
bate and said: 

"That the manufacture of steel in America was 
rather in its infancy; but as all the materials neces- 
sary to make it were the product of almost every 
State in the Union, and as the manufacture was 
already established, and attended with considerable 
success, he deemed it prudent to emancipate our 
country from the manacles in which she was held 
by foreign manufactures." 

Can anything more admirably apply to the pres- 
ent condition of sugar than that statement? Here 
is a product which now, like iron and steel was 
then, is in its infancy, and we can strike from our 
hands the " manacles of foreign manufactures" by 
fair encouragement. Mr. Madison then came 
into the debate, and — 

" Thought the object of selecting this article to 
be solely the encouragement of the manufacture and 
not revenue, for on any other consideration it would 
be more pioper, as observed by the gentleman from 
Carolina [Mr. Tucker] to give a bounty on the im- 
portation." 

From these gentlemen, representing different por- 
tions of the country, there is, then, as early as 1789, 
in the debates of Congress this recognition of the 
power of the Congress to give a bounty, a payment 
from the Treasury of the United States, to those 
who are ready to embark in the industry that would 
be for the public good. 

At the same Congress there came a question with 



11 

respect to hemp as to whether it should be culti- 
vated and protected in this way, and in the Aunals 
of Congress you will find that Mr. Partridge, I think 
he was from Massachusetts — 

" Informed the committee that the State of Massa- 
chusetts imposed only a duty of one per cent on the 
importation of hemp, which was applied to form a 
bounty of a dollar per hundred weight on that 
raised within the State. 

" Mr. Hartley preferred giving a bounty on hemp 
of American growth to taxing the foreign, because 
the existence of the manufacture and of ship-build- 
ing also was involved in the price of the raw ma- 
terial." 

No man to gainsay these different suggestions of 
bounty npon hemp and steel. 

The Comptroller. Have you investigated the 
question that there was nobody to gainsay it? 

Mr. Manderson. Yes, sir; I have investigated 
it, and in the Annals of Congress you will find that 
there was no one to attack the bounty principle ex- 
cept as I shall call your attention to it, that here and 
there, some man expressed a doubt as to whether it 
was the best way to reach the result. But as to the 
question of the constitutionality of giving the bounty, 
there is scarcely a whisper. 

No mean man entered the discussion, no small 
lawyer was heard when Daniel Webster rose to speak. 
If there was constitutional objection to the payment 
of bounties, is it not to be presumed that that great 
constitutional lawyer would raise the objection? Is 
it not to be presumed that he would say to his col- 
leagues in the Congress of the United States , ' ' beware ; 
you are encroaching too far upon this fundamental 
instrument; you are attempting that which is forbid- 
den. Pass not this proposed law. Let us not give 
bounties, because neither under the power to regu- 



78 

late commerce nor under the power to provide for 
the general welfare, can you do this thing?" No 
suggestion of that kind ever came from Webster, the 
great expounder of the constitution. On the con- 
trar}^, he is reported in the annals as saying: 

"If it be thought useful and necessary, from politi- 
cal considerations, to encourage the growth and 
manufacture of hemp. Government has abundant 
means of doing it. It might give a direct bounty, 
and such a measure would, at least, distribute the 
burden equally." 

It does seem to me that when as citizens we come 
to the consideration of this question, the words of 
that eminent lawyer should carry great w^eight even 
to the mind of the modern tariff reformer. Mr. King, 
a democrat of New York, on the question to strike 
out of the bill the two per cent, per pound on hemp, 
said: 

" If gentlemen wish to encourage the production of 
hemp and iron, they ought to bring in a bill to give 
bounties on these articles. The burden would then 
fall equally on the community." 

There is this to say in regard to a bounty as a pref- 
erable method of encouraging, that it does fre- 
quently make a more equal distribution for a public 
purpose and for the general w^elfare than do impost 
duties. 

Now, let us see what some of the early laws were. 
When the item of sugar in the tariff act of 1794 was 
under consideration Mr. McDowell, of North Carolina, 
considered it — "highly impolitic to tax the infant 
manufacturers of America. He would rather, if the 
public Treasury could afford it, give a premium 
(or bounty) for the encouragement of our manufac- 
turers." In the first tariff act (Vol. i, Statutes at 
large, p. 24) there was a bounty on fish. By sec- 



\ 



79 

tion 4 of that act a bounty or allowance was made as 
follows: 

"On every quintal of dried fish and on every barrel 
of pickled fish of the fisheries of the United States 
exported, and on every barrel of salted provisions of 
the United States exported, 5 cents per barrel, in 
lieu of the drawback on imported salt used." 

lyct me turn for a moment, for there has been sug- 
gestion that this was not a bounty, but a drawback — 

The Comptroller. You have seen Mr. Whit- 
ney's brief? 

Mr. Manderson. I read his brief in the case in 
the Court of Appeals. 

The Comptroller. That is the one I mean. 

Mr. Manderson. Yes; I have read it, and I 
read the brief of the other side as well; and let me 
say as to that case what I may say later on in more 
amplified form, that in the brief of the attorneys who 
represented Miles there is nothing suggested with 
reference to the constitutionality of the bounty, and 
it is evident they never supposed the point would be 
raised. The Court of Appeals seemed to rush in 
where it is said angels fear to tread. It took up a 
question not presented to it by the two sides of the 
controversy. Departing from the rules laid down by 
the courts, it saw fit as mere dictum, in a case where 
the question was not involved, to declare that boun- 
ties were unconstitutional. I read the brief of Mr. 
Whitney, and I also read the brief of the other side, 
and I saw there was a one-sided presentation of the 
proposition of unconstitutionality. I have no ques- 
tion that the attorneys of Miles never for a moment 
considered that the court would forget the rule of all 
courts of high authority, which says that a court will 
not pass upon a constitutional question when a case 
can be decided on any other, and as mere dictum it 



So 

would announce that bounty laws were unconstitu- 
tional. In the bowels of a judicial opinion two of 
the Judges have interjected a political speech. 

Let us see whether this was a drawback or a 
bounty. The first bounty encouragement for fish- 
eries was enacted for two purposss, first, to give the 
fishermen a drawback equal to the duty on foreign 
salt used, and to train men for sea service and so 
furnish us with sailors in time of war. There was a* 
drawback on foreign salt used, allowed our cod-fish- 
erman in the first tariff act. That can be found in 
the first volume of the Statutes at Large, page 24. 
But this drawback, passed in 1789, was abolished by 
an act of February 18, 1792, and a direct bounty, not 
a drawback, was given to vessel-owners engaged in 
cod fishing, three-eighths of it going to the fishermen 
— an encouragement of the industry by direct bounty, 
and as an encouragement to men who would be fitted 
to man our navy, it provided that three-eighths of 
the bounty should go to the fishermen themselves. 
(Stat, at Large, Vol. i, page 229.) 

That bill was discussed very fully on the point 
involving the power to grant bounties; and to test 
the sense of the House Mr. Giles, of Virginia, 
moved to strike out the first section of the bill. 
Now here is one of the whispers concerning unconsti- 
tutionality. He observed that the constitutionality 
of the proposition struck him in doubtful point of 
view, and it being the first attempt made to exercise 
•such power (in which he was mistaken) he felt 
justified in making his motion. A motion to strike 
out the words "bounty now allowed" and insert 
"allowance now made" was defeated. So the Con- 
gress at that early day was not frightened by the 
use of the word "bounty." They did not see fit 
even to substitute the milder term "allowance" for 



8r 



^ 'bounty.^' They met the issue as it was presented, 
and by a large vote they said " No, we do not mean 
'allowance,' we mean 'bounty,' and we say so." 
This bounty to vessel owners was increased in 1813 
and again increased by the act of March 3, 1819. 
(See 3 Stat, at Large, p. 51.) 

If this allowance to cod-fishermen was merely a 
drawback, why was the drawback on foreign salt 
repealed and a fixed allowance given the vessel own- 
ers, depending on the size of the vessel, and why 
were the fishermen given three-eighths of the allow- 
ance? And why was there a provision in the law 
(Sec. 3) making skippers who signed the shipping 
agreement "liable to the same penalties as deserting 
seamen or mariners?" And why did Section 7 of 
the act provide that any deficiency which should 
exist to pay the bounties to vessel owners should be 
paid out of any moneys which from time to time 
should be in the treasury not otherwise appropri- 
ated? And why require the vessels to be at sta four 
months? And why pay the bounty whether the fi;;li 
were exported or not? The drawback went only to 
exportation, but the bounty provided by the act of 
1792 had nothing to do with exportation. If the 
vessel was at sea four months and was of the proper 
burthen, she received the bounty, five-eighths of it 
going to the owner of the vessel and three-eighths 
of it among the seamen. 

It certainly seems to me that Mr. Whitney could 
not have fully investigated the subject or he would 
not have taken the position that I remember he 
advanced in his brief, that this was not a bounty but 
a simple drawback and was not in the nature, as I 
remember his expression, of a bounty to ship- 
owners. 

In the case of the schooner "Harriet," these 

6 



82 

fisheries bounties were under consideration as to 
whether applicants were entitled. The Government 
did not raise any point as to the constitutionality of 
the law. On the contrary, there was no pretense 
that they were unlawful. Had there been anything 
in the question, counsel for the Government would 
have raised the point. On the contrary Judge Story, 
no mean authority, expressly said that the law ex- 
hibited on the part of Congress "an intention to en- 
courage cod-fisheries of every sort," and by means of 
bounty. We come down to a later date. July 2, 
1846, the Walker tariff was up in the House, in Com- 
mittee of the Whole. A motion was made to repeal 
all laws allowing bounties on vessels engaged in the 
cod-fisheries, and it was agreed to in Committee of 
the Whole, loi to 77. (Cong. Globe, 29th Cong., 
ist Session, pages 1049-105 1.) But the House re- 
fused to agree with the Committee of the Whole (ib., 
p. 1053), and the act was not repealed. 

Now, there are other acts of Congress recognizing 
this principle. In 5 Statutes at Large, a bounty was 
given by the Government in the shape of lands. 
What distinction can be drawn by the most astute 
and the most dissecting intellect between that which 
gives away the money of the people and that which 
gives away their land? Both are property, and yet 
land bounties have been a thing established from the 
beginning, and the Government with most liberal 
hand has taken of the lands of the people, and in the 
shape of bounties, given them for public purposes. 
It has given to individuals and to corporations to an 
extent that almost bankrupts figures and all parties 
have agreed to the policy. 

Thk Comptroller. Is there not in Congress a 
complete power of disposition over the public lands? 

Mr. Manderson. Certainly. But it is also under 



83 

the same control as is the disposition of the money of 
the Government. 

The Comptroller. Is it not by express consti- 
tutional provision declared that Congress shall dis- 
pose of the public lands? 

Mr. Manderson. Congress may dispose of public 
lands, but does that mean that it can give them away 
as bounties any more than it can give away the 
money of the country in order to provide for the gen- 
eral welfare and to encourage commerce? I reply to 
your question by asking another. 

The Comptroller. I think the one is specific- 
ally provided for and the other is not. 

Mr. Manderson. The other is just as specific- 
ally provided for. Passing the proposition advanced 
by Attorney General Black and others that Congress 
may appropriate money as a gift to any person the 
disposition of both species of property — land or 
money — should be for a public purpose and Congress 
is the judge of what is a public purpose. 

The Comptroller. That is what I want to 
know. 

Mr. Manderson. As w^e have seen, the fore- 
fathers of the country were disposed to give bounties. 
A bounty in the shape of lands was given to Dr. 
Perrine to cultivate and propogate tropical plants, 
and much land, as I recall it, was given to him for 
that purpose, probably to great public advantage. 
We have given homesteads to our soldiers. That is 
a bounty in land, but we have given them bounties 
in money as well. If there is a distinction in the 
Constitution, such as Your Honor suggests, that 
Congress may give away the people's property in 
the way of lands and not the people's property in 
the shape of money, why have we not stopped at 
giving our soldiers lands and refrained from giving 



84 

money as bounties? Those who remember the days 
of 1861 to 1865, recall that enlistments and re-enlist- 
ments were obtained by the Government of the 
United States paying out the people's money in the 
way of bounty, and no one hesitated to call it 
bounty. Was such money bounty unconstitutional? 
No one dare say so. 

I shall not enter into the discription of that which 
I see I presented fully in the argument in the Senate, 
showing what has been done by States, because I 
realize the distinction drawn by all the authorities 
between the Constitutions of States and the Constitu- 
tion of the United States, that the Congress is one of 
delegated powers, granted by the Constitution, and 
that the State legislatures are bodies which exercise 
all powers vested in the people except where spe- 
cially prohibited by the State Constitution. For that 
reason, for the purpose of this argument, I shall not 
enter into the discussion of that question. 

Now, let us see what has been said upon this im- 
portant question by some great men of the olden 
times, distinguished in history, honored by their 
country, whose memories we revere and whose words 
of wisdom we read with respect and admiration. In 
1 79 1 iVlexander Hamilton wrote a report, which 
grew out of the first tariff act. Let us see what he 
said. 

"Bounties are especially essential in regard to 
articles upon which those foreigners who have been 
accustomed to supply a country are in the practice 
of granting them. The continuance of bounties on 
manufactures long established must always be of 
questionable policy, because a presumption would 
arise in every such case that there were natural and 
inherent impediments to success, but in new under- 
takings they are as justifiable as they are oftentimes 
necessary. There is a degree of prejudice against 



85 

bounties from an appearance of giving away the 
public money without an immediate consideration, 
and from a supposition that they serve to enrich a 
particular class at the expense of the community." 

It seems to me that I have heard something like 
this in the later day, but it goes further than did 
Alexander Hamilton. He said these suggestions 
come from doubts as to policy. The later day con- 
struer of the Constitution of the United States finds 
that his suggestions come from doubts of constitu- 
tional right. Your tariff reformer knows more of the 
Constitution than the men who framed it. What else 
does Hamilton say? 

"But neither of these sources of dislike will bear a 
serious examination. There is no purpose to which 
public money can he more beneficially applied than 
to the acquisition of a new and useful branch of 
industry — no consideration more valuable than a 
permanent addition to the general stock of productive 
labor. As to the second source of objection, it equally 
lies against other means of encouragement which are 
admitted to be eligible. As often as a duty upon a 
foreign article makes an addition to its price it causes 
an extra expense to the community for the benefit of 
the domestic manufacture." 

That might be quoted by some democratic orator 
on the proposition that the consumer pays the tax. 

"A bounty does no more. But it is in the interest 
of society in each case to submit to the temporary 
expense, which is more than coiiipensated by an 
increase of industry and wealth, by an augmentation 
of resources and independence, and by the circum- 
stance of eventual cheapness, which has been noticed 
in another place." 

It seems to me that these be words of wisdom. 
Alexander Hamilton in that report never for a single 
moment or in a single sentence suggested that 



86 



bounties were unconstitutional. He said that as 
between the two methods of encouragement they 
were the better in many instances because they the 
more evenly and more equally distributed the burden. 
In 1831 there came into executive place Louis 
McLane, who was the second Secretary of the 
Treasury under Andrew Jackson. He mede a report 
on December 7, 1831, in which he said: 

"If it could be shown that the labor and capital of 
the United States required greater aid to shield them 
from the injurious regulation of foreign States, sound 
policy would rather recommend a system of bounties 
by which the duties collected from imports might be 
directly applied to the objects to be cherished, -than 
the accumulation of money in the Taeasur)-. * * 
* The objects more particularly requiring the aid of 
the existing duties, upon the principles of this 
report, are believed to be wool, woolens, cottons, 
iron, hemp, and sugar, as comprehending those 
articles in which the agricultural and manufacturing 
industry are more particularly interested." 

This sterling old democrat did not seem to have 
any doubts in his mind about the constitutionality 
of a bounty. Never for a moment was he disturbed 
by that proposition, and that which they all labored 
upon and that which they argued in their reports 
was the question as to which of the two methods, 
both of them constitutional, was the better policy — 
a payment by bounty or a collection of revenue by 
duty. 

Here is another democrat. Secretary Ingham, who 
was first Secretary of the Treasury under Andrew 
Jackson. I commend this to my brother Whitney 
who succeeded by his argument in leading astray 
Judge Sheppard, of the Court of Appeals, with the 
flock that followed the shepherd. 

"The bounty on vessels — " 



a? 

Says Secretary Ingham — 

"employed in the cod fisheries is understood to 
be unlawfully obtained by some of those engaged in 
the mackerel fisheries. .It is believed that a bounty 
on the fish cured or exported, without reference to 
the origin of the salt, would better promote what- 
ever encouragement may be considered as proper to 
be given to the fiisheries." 

I read these extracts from the official reports that 
are in the Treasury Department, showing in that 
older and better time for expounding the Constitu- 
tion, what were the views of those distinguished 
statesmen of all political complexions upon the ques- 
tion of the constitutionality of bounties. Mr. Dallas 
in 1816, gives us some very valuable statements. 
February 12th he writes of the various methods 
of encouraging industries — 

"Which, being recently or partially established, 
do not at present supply the whole demand for 
domestic use and consumption, but w^hich w^ith 
proper cultivation are capable of being matured to 
thewh ole extent of the home demand." 

"But it appears to have been the early and con- 
tinued practice and policy of the Government to 
afford encouragement to manufactures and domestic 
products rather by the imposition of protecting duties 
than by grants of bounties or premiums." 

No trouble in his democratic mind as to the con- 
stitutionality, but he says the principle seems tp 
have been to encourage by duties rather than by 
bounties or premiums. I might read at great length 
and to my exhaustion and the exhaustion of Your 
Honor's patience extracts from many other dis- 
tinguished statesmen, but I shall not take the time 
so to do. 

I will give you but this quotation from Justice 
Story on the Constitution: 



88 



"Paragraph 965. The language of the Constitu- 
tion is 'Congress shall have power to lay and col- 
lect taxes, duties, imposts, and excises.' If the 
clause had stopped here, and remained in this abso- 
lute form (as it was in fact, when reported in the 
first draft in the convention), there could not have 
been the slightest doubt on the subject. The abso- 
lute power to lay taxes includes the power in every 
form in which it may be used, and for every purpose 
to which the Legislature may choose to apply it. 
This results from the very nature of such an unre- 
stricted power. A fortiori it might be applied by 
Congress to purposes for which nations have been 
accustumed to apply it. Now, nothing is more 
clear, from the history of commercial nations, than 
the fact that the taxing power is often, very often, 
applied for other purposes than revenue. 

"It is often applied as a regulation of commerce. 
It is often applied as a virtual prohibition upon the 
importation of particular articles; for the encourage- 
ment and protection of domestic products and in- 
dustry; for the support of agriculture, commerce, 
and manufactures; for retaliation upon foreign 
monopolies and injurious restrictions; for mere pur- 
poses of State policy and domestic economy; some- 
times to banish a noxious article of consumption; 
sonetimes, as a bounty upon an infant manufacture 
or agriculture product; sometimes, as a temporary 
restraint of trade; sometimes, as a suppression of 
particular employments; sometimes, as a prerogative 
power to destroy competition and secure a monopoly 
to the Government." 

A thing of later development in the matter of 
bounties, the constitutionality of the payment of 
which has never been questioned, is the numerous 
bounties that have been paid to our ship-builders. 
These bounties or premiums or whatever you ma}^ 
see fit to call them which the Congress of the United 
States has granted to ship-builders who, in ships 
manufactured for the Government, shall exceed a 



89 

certain rate of speed, differ, I suggest, in no way, in 
principle, from the proposition that was made to the 
sugar producers. 

The Comptroller. Were they not direct con- 
tracts? 

Mr. Manderson. So was this a direct contract, 
made by the highest contracting power in the Gov- 
ernment of the United States, its legislative depart- 
ment. That was a contract to the shipbuilders by 
the legislative department. The Congress said: 
* 'Increase the speed of our vessels, and we will pay 
you a certain bounty per every fraction of a knot 
that you increase the speed." They said to the sugar 
people: "Grow sugar and supply the demand of 
this country for it to a greater degree than you do, 
and we will give you a bounty for every pound that 
you produce." Both were propositions made to the 
benefit of private individuals for a public purpose 
and for the general welfare. 

Your mind is made up of very different material 
from mine if you can find in principle any difference 
or distinction between these two propositions ema- 
nating from the same source, designed for exactly 
the same thing, for a public purpose, for the ad- 
vancement of the general welfare and the common 
defence of the United States. We have gone on 
under these contracts, and, without anybody raising 
question as to whether the warrant should be coun- 
tersigned or whether the transaction coming from 
the Navy Department should be criticised, we have 
paid on the Columbia, $300,000; on the New York, 
$200,000; on the Detroit, $150,000; on the Olympia, 
$200,000; on the Montgomery, $200,000, on the 
Marblehead, $125,000; on the Baltimore, $106,000; 
on the Indiana, $100,000; on the Minnesota, $400,- 
000; making $1,781,000, and for additional horse- 



power 1438,000, ill all $2,219,000. That sum lias 
gone into the pockets of those who build ships^ 
under contracts made with the legislative depart- 
ment of the United States, a contract no more 
sacred, having in it no more power, no more consti- 
tutional force, than that made with the men who 
embarked their all in this enterprise which it is now 
proposed to stifRe and destroy. 

Let us come to the question of sugar and see what 
has been suggested as to bounties for it. In 1864 
the Commissioner of Agriculture alluded to the im- 
portance of the United States producing its owu 
sugar, and he suggested bounty to encourage that 
result. He said: 

''Considering that we pay nearly $100,000,000 
annually for foreign sugar, and this may be made 
from the beet at less than half the [then] price of 
sugar from cane, it wou'd seem to be the part of 
wisdom in the Government to encourage it in some 
direct form." 

]\Ir. Ray, of New Hampshire, offered an aniend- 
ment to the tariff bill of 1883 giving a bounty on 
sugar, but it was ruled out of order under the rules 
of the body, but no one raised the question of its un- 
constitutionality. 

The Commissioner of Internal Revenue, Mr. 
Wells, in his report of November 25, 1882, refers to 
the internal revenue tax on sugar and suggests its 
removal, but says: 

" The objection would be the abolition of the pro- 
tection now offered to the sugar interests of Louisi- 
ana and other States. This difficulty might be met 
by giving a bounty of say two and one-half cents 
per pound on all home-produced sugar." 

He proceeds to say that the slow development of 
production did not promise a home supply; that if 



91 

it did the question might be different. He then 
produced a table showing the fluctuation of produc- 
tion. Proceeding, he said: 

" I apprehend if sugar was not produced in this 
country, Congress would not hesitate to remove the 
duty as the best means of reducing taxation. The 
present law gives to sugar planters four to five million 
dollars per annum. My proposition would be to give 
them this amount directly, and let the whole people 
have the benefit of the reduction of taxation, say 
$49,000,000, which would in this way be effected. 
The principle of paying a bounty for the encourage- 
ment and development of American industry is 
not new." 

And it is not new, as I think I have pretty fully 
and satisfactorily shown. 

In the estimation of the courts the pivotal point 
in all bounty legislation, that which controls in this 
giving away of the means of the people to a private 
party, is the question whether the gift is for public 
purpose. Was this bounty for a public purpose? 
True, it goes into the pockets of individual pro- 
ducers. Who are they? Take this particular case 
of the money that has been paid and of the money 
that is to be paid to the Oxnard Beet Sugar Company 
of Nebraska. Are they the final recipients of the 
bounty of the Government. Not so". It is true they 
are the claimants, it is true that the money in the 
first instance goes to them, but let me suggest to you 
that when you strike it from their reception you 
take it from the pockets of those who produce the 
sugar beets. You take it from the pockets of the 
agriculturists of that State, who as one man are de- 
manding that the Government shall stand by its con- 
tract that was made for their benefit and that it shall 
not strike down an industry which promises to them 
so much of good. 



92 

What were the public purposes that led to the 
enactment of the bounty law? We had a surplus in 
those days that seems now^ to have gone glimmering. 
We had so much money that we did not know what 
to do with it. "It was a condition and not a 
theory '' in the language of another, that confronted 
us at that time. The first proposition was to reduce 
the surplus. The next proposition was to increase 
our domestic sugar production, to diversify agricul- 
ture, to render us independent of the world for sugar. 
Can there be any question about these being public 
purposes? If they are not, then no protective tariff 
that has ever been passed has any foundation in the 
Constitution of the United States except on the 
principle invoked by Jeremiah Black, which says 
that Congress can give away anything. To keep at 
home millions that we annually send abroad for 
sugar was decidedly a public purpose. The balance 
of trade is paid in gold, rather a precious commodity 
just now, one that we hate to see leave our shores; 
and the minds of statesmen, members of the execu- 
tive and of the legislative branches of the Govern- 
ment, and the minds of the people are much con- 
cerned to know how we can best keep the gold to 
ourselves and not send it abroad. I have no ques- 
tion that we will pay out this year probably 
$150,000,000 in gold for foreign sugar. Do you 
think that is an over-estimate, Brother Caffery? 

Mr. Caffery. Oh, no. 

Mr. ]\Ianderson. Probably at least $150,000,000; 
and I have no question that if the McKinley bounty 
law had been allowed to stand it w^ould not have 
been many years until we should have seen the 
progress of diminution in the importation of sugar 
so great that not one dollar would be paid to foreign 
countries for the production of sugar. To cheapen 



93 

the price of sugar was a public purpose. That is 
especially true when we consider that we are the 
great sugar-consuming country of the wor.d. I 
remember saying to a gentleman a year ago that we 
should produce probably 8,000,000 pounds of sugar 
in Nebraska from the growth of the beet. He said 
"that is enormous; it is enough to supply the whole 
trans-Missouri country." I said: "My friend, do 
you realize the fact that in Nebraska alone — and we 
of the wild and woolly West are not particularly 
sweet-toothed — we consume 80,000,000 pounds of 
sugar every year." No country, except Great Brit- 
ain, consumes more sugar per capita than does the 
United States, and Great Britain consumes a greater 
amount per capita simply because of the enormous 
production of bottled and canned fruits, the marma- 
lades and the jams, and all that sort of thing, which 
in very large quantity she exports to her possessions 
in the colonies and also to this country to a very 
great degree. With this enormous consumption of 
sugar in the United States is it not desirable that we 
should cheapen it if we can? 

Another object was to open wider foreign markets 
for our products through reciprocity agreements. 
I realize that to democratic ears I am trench i nor on 

o 

dangerous ground when I make any reference to 
reciprocity. Time was when reciprocity agreements 
with foreign countries were not laughed at. Time 
was when they were not whistled down the wind by 
the public orator and condemned by resolution in 
the Congress of the United States. Time was when 
they were carefully preserved, extended, fostered 
and nurtured to the great good, to the enormous 
benefit of this country. I believe that history will 
repeat itself and that that time will come speedily 
again. 



94 

The public purposes I have named which actuated 
the passage of the act in question are not overcome 
by the fact that the money goes to private individ- 
uals. The money as to all other bounties that have 
ever been paid went to private individuals, to the 
soldier, to the shipbuilder, to the cod fisherman. 
The private individual has been the recipient of the 
bounty. But does that effect it? In the Sharpless 
case, 21 Pennsylvania, the legislature authorized a 
common council to issue bonds of the city in favor 
of two railways, and taxpayers sought to .enjoin 
their issuance on the ground that they were for a 
private and not for a public purpose. Judge Jere- 
miah Black said: 

"That a tax law must be held valid unless it 
be for a purpose in which the people taxed have 
palpably no interest, where it is clearly apparent 
that the burden imposed is for the benefit of others 
and where it would be so pronounced at first blush. 

"It is argued that this case is one where it will be 
taxation for a private purpose, because the money 
levied will be in effect, handed over to a private cor- 
poration. The right to tax depends on the ultimate 
use, purpose and object for which the fund is raised, 
and not on the nature or character of the person or 
corporation. 

"To aid, encourage or stimulate commerce, domes- 
tic and foreign, is a duty of the sovereign, as plain 
and as universall}^ recognized as any other. It is a 
grave error to suppose that the duty of a State stops 
with the establishment of those institutions which 
are necessary to the existence of government, such 
as the administration of justice, the preservation of 
the peace and the protection of the country against 
foreign enemies. It is the interest of the city which 
determines the right to tax the people. It is not our 
business to determine what amount of interest the 
city has. It is enough for us to know that the city 
may have a public interest in the roads and that 



95 

there is not a palpable and clear absence of all pos- 
sible interest perceptible to every mind at first blush. 
All beyond that is a question of expediency, not of 
law, much less of constitutional law. Issue of bonds 
held valid, being for a public purpose." 

That is a State case, and this that I propose to 
quote from, lo Wisconsin, is a State case, but the 
principle in these cases, thus decided in the States, 
and the principle with reference to matters arising 
under the Constitution and laws of Congress, is in 
this respect, as to whether a bounty or donation is 
for a public purpose, in no wise different, and the 
cases cited are on all fours with the matter under 
consideration. In lo Wisconsin, page 224, the 
court said: 

"Public and individual interests are often so inti- 
mately connected and blended together, that it is 
impossible to advance the one without at the same 
time advancing the other. There is no public good 
without at the same time a private benefit; they are 
inseparable. The former cannot exist without the 
other. If the latter be not promoted it proves that it 
is not a public good, and to determine whether a 
matter is of public or merely a private concern, we 
have not to determine whether or not the interests of 
some individual will be promoted, but whether the 
interests of the whole, or the greater part of the com- 
munity, will be." 

It is within this line of reasoning and suggested 
cases that the bounty law of 1890 falls. I shall not 
take time to make more than a mere reference to a 
very important case in 9 Michigan, which I presume 
is familiar to Your Honor, known as the salt bounty 
case. I will read simply from the syllabus: 

"Where a bounty offered under a law of the State 
is actually earned, the reduction of the bounty by a 
subsequent amendment of the law does not deprive 



96 

the party of the full bounty given by the original 
act." 

The East Saginaw Salt Manufacturing Company 
brought a suit against the Board of State Auditors. 

' ' The court held that the relators had acquired a 
vested right to the bounty offered by the act of 1859,. 
upon all the salt manufactured before the act of 1861 
took effect, and that they could not be deprived 
thereof by the last-mentioned act." 

It is well to note, I will say in passing, that these 
bounty acts upon the production of salt in the State 
of Michigan were without any limit in regard to 
time. As they read, the bounty was to be paid for- 
ever. Of course there was no question but that such, 
a bounty law, having no limit in time, could at any 
time be repealed; but even where such a bounty law 
has been passed without limit of time, if, pending it 
and before its repeal, a manufacturer has earned the 
bounty under it, the repeal of the law before the pay- 
ment of that bounty will not prevent its payment. 

From 9 Michigan Reports, I turn to 13 Wallace, 
in which there is another leading case upon this ques- 
tion. This case went up from the State of Michigan, 
and was based upon the same salt-bounty act. The 
syllabus is: 

" I. A law offering to all persons and to corpora- 
tions to be formed for the purpose, a bounty of 10 
cents for every bushel of salt manufactured in a State 
from water obtained by boring in the State, and 
exemption from taxation of the property used for the 
purpose, is not a contract in such a sense that it can 
not be repealed. 

''2. Such a law is nothing but a bounty law, and 
in its nature a general law, regulative of the internal 
economy of the State, dependent for its continuance 
upon the dictates of public policy, and the voluntary 
good faith of the Legislature." 



97 

Now, I turn to the opinion of Mr. Justice Bradley 
and read a portion of it: 

"That all corporations and individuals who shall 
manufacture salt in Michigan from water obtained by 
boring in that State shall be exempt from taxation 
as to all property used for that purpose, and after 
they shall have manufactured 5,000 bushels of salt 
they shall receive a bounty of 10 cents per bushel. 
That is the whole of it. As the Supreme Court of 
Michigan says, it is a bounty law, and nothing more; 
a law dictated by public policy and the general good, 
like a law offering a bounty of 50 cents for the killing 
of every wolf or other destructive animal. Such a law 
is not a contract except to bestow the promised bounty 
upon those who earn it, so long as the law remains 
unrepealed. There is no pledge that it shall not be 
repealed at any time. As long as it remains a Liw 
every inhabitant of the State, every corporation hav- 
ing the requisite power, is at liberty to avail himself 
or itself of its advantages, at will, by complying with 
its terms and doing the things which it promises to 
reward, but is also at liberty at any time to abandon 
such a course. There is no obligation on any 
person to comply with the conditons of the law. It 
is a matter purely voluntary; and, as it is purely 
voluntary on the one part, so it is purely voluntary 
on the other part. 

"That is, on the part of the Legislature to con- 
tinue or not to continue the law. The law in question 
says to all: You shall have a bounty of 10 cents per 
bushel for all salt manufactured, and the property 
used shall be free from taxes. But it does not say 
how long this shall continue; nor do the parties who 
enter upon the business promise how long they will 
continue the manufacture. It is an arrangement de- 
terminable at the will of either of the parties, as 
much so as the hiring of a laboring man by the day." 

As against these decisions let me refer for a 
moment to the language of Judge Sheppard in the 
District Court of Appeals in his dictum, in his v.u- 
7 



98 

called for, unbased dictum, in the Miles case. He 
says: 

"That no amount of incidental public good or 
benefit will render valid, taxation, or the appropria- 
tion of revenues to be derived therefrom, for a private 
purpose." 

Now, put that remarkable sentence by the side of 
the authorities I have read and by the side of the 
authorities that I shall read. 

Let me read this astonishing dictum again. 

"That no amount of incidental public good or 
benefit will render valid, taxation, or the appropria- 
tion of revenues to be derived thereform, for a private 
purpose." 

On the contrary Judge Black — I shall draw no 
personal comparisons between the two, says that no 
matter what the amount of the private benefit, if 
there is a public purpose it is sufhcient to be full 
warrant for the passage of the law. 

I do not know whether in the course of this some- 
what rambling discourse I have suggested who is the 
judge of the public purpose — First the legislature, 
the Congress; secondly, the courts. Judge Shepard 
in this language not only assumes the bounty law to 
be for a private purpose, in order to arrive at his con- 
clusion, but his remark also shows that even if there 
were some public benefit attached it wall not suffice. 
That is in the teeth of Judge Black's remark: 

"It is not our business to determine what amount 
of interest the city has. It is enough for us to know 
that the city may have a public interest in the roads 
and that there is not a palpable and clear absence of 
all possible interest perceptible to every mind at first 
blush. All beyond that is a question of expediency, 
not of law, much less of constitutional law." 



^ 99 

It is not possible that the case of the Miles Plan- 
tation Company on motion for a mandamus against 
the Secretary of the Treasury, should be regarded by 
you as an authority. There still remain judges who 
are disposed to go beyond the requirements of the 
oitly iss2ie before them^ and in the refusal oi Q\\\^{ 
Justice Alvey of the District Court of Appeals, to 
consider the question of the "constitutionality" of 
the bounty law, we find a sufficient rebuke to answer 
all the purposes of a wise administration of the law. 
Mr. Justice Sheppard's talk about the "constitution- 
ality" of the bounty was mere dictiun. The best 
possible thing that can be said of this effort to get 
beyond the requirements of that case is, that the 
point was raised by the Government; that it was not 
necessary to decide the case and finally that it was 
a violation of the obligations of judicial duty and 
forbearance and was so considered by presiding Jus- 
tice x\lvey. (See also Cooley on Const. Law, 2nd 
ed., p. 152.) 

Against the dictum — for that is all it can be 
called — of Justice Sheppard there is the decision of the 
second highest tribunal in the land, the UnitedStates 
Circuit Court of Appeals in 54 Federal Reporter, 804, 
holding the bounty statute to be a contract — repeal- 
able only because Congress may avoid any of its con- 
tracts (iioU. S. Rep., p. 643); and holding that 
bounty earned before repeal was an asset belonging 
to the sugar producer. True it holds that Congress 
has the power to repudiate, but it has not repudiated 
for bounty earned because of (beet) sugar produced 
before repeal, and it also gave equitable compensa- 
tion for all sugar to be produced from the crop of 
1894. Had the statute of 1890 been enacted by a 
state legislature, it might not have been repealed 
because of the time limitation and the restriction on 



lOO 



the power of States to impair the obligation of con- 
tracts, 9 Mich., 327; 19 Mich., 274, which does not 
apply to Congress, no U. S. Rep., p. 643. 

So that, as against dictiun of Justice Sheppard, of 
the District Court of Appeals, we have the decision 
of the second highest court in the land holding 
that as to bounty earned, there was a contract and a 
vested interest which agrees with 9 and 19 Mich, 
(supra) to that extent. In the Calder case the 
court said: 

"In our opinion the bounty, so called in the 
statute, is not a pure gratuity or donation by the 
Government, but was intended to be, and is in fact, 
a standing offer of reward and compensation to 
sugar producers, to encourage and stimulate them 
in the otherwise losing business of producing sugar 
in the United States. When a producer of sugar 
accepts the offer and complies with the statute, it 
would seem to be as much a contract as it is possible 
for any citizen to make with the Government. All 
the elements of a contract are present; the terms, 
the consideration and the lawful object. It is true 
that the Government can repeal the statute, and re- 
fuse to pay the bounty earned upon sugar that has 
been produced under the promise and within the 
statute, but so could the government do with any 
admitted contract for any public work. The ap- 
pellants contended that the bounty offered by the Gov- 
ernment was a pure gratuity, without consideration, 
revocable at pleasure, and that until payment is 
actually made is not property. The claim of Calder, 
who accepted the terms of the act for the year 1891, 
for sugar produced that year, is a claim arising 
under a contract — a just claim, and one that the 
Government cannot avoid otherwise than by re- 
pudiation. * * * * It is an actuality, a 
vested interest." 

Having a power — to avoid its contracts, which 
the States have not (no U. S. Rep., 634-643), and 



lOI 

having bound itself by a contract, and desiring more 
revenue, Congress thought proper to repeal the act 
of 1890 and to give the sugar producers damages, or 
equitable compensation in part for the injury which 
the repeal would entail. The States having given 
Congress a greater power than the States possess in 
regard to impairing the obligation of contracts, is it 
even reasonable to suppose that Congress would 
have been given that power unless it was supposed 
that it had and would exercise the power to appply 
money as it might deem proper to repair damages 
which might ensue under avoided contracts? 

The voting of money to private parties does not 
make a statute for a private purpose, and as against 
the dictum of Judge Sheppard on the point of the 
power of Congress to tax, we have the opinion of 
the highest court to the effect that the "power of 
Congress to tax is a very extensive power. It is 
given in the Constitution with only one exception 
and two qualifications, viz. Congress cannot tax ex- 
ports, and it must impose direct taxes by the rule of 
apportionment, and indirect taxes by the rule of 
uniformity. Thus limited, and tlnis only, it reaches 
every subject and may be exercised at discretion." 
I quote from 5th Wallace, 471. 

We should all the time keep in clear view the 
distinction between collecting or raising a tax and 
the appropriations by Congress of the money thus 
raised. 

Now I come to the consideration of a case which 
I think has been more misrepresented, more mis- 
construed and more distorted than any other case I 
have ever read of. I r fer to the decision of Mr. 
Justice Miller, reported in 20 W^allace. That emi- 
nent judge for a quarter of a century before his death 
was my close and dear friend. I practiced law 



102 

before him when, as a Justice of the Supreme Court, 
he held court in the district of Nebraska, and I saw 
much of him after my lot called me here. I have 
talked with him by the hour upon those suojects on 
which lawyers are very apt to converse when they 
get together. I know that Mr. Justice Miller felt 
that his decision in that case had been frequently 
used for purposes that he never in the world would 
have countenanced. You can take certain parts of 
his decision, and stripping the sections from their 
surroundings, you can prove some things for your 
purpose, but Mr. Justice Miller, in the case in 20 
Wallace said nothing that militates in the least 
against the proposition for which we are contending 
here. What he says about bounties to private enter- 
prises will be controverted by nobody. What he 
said that is applicable was that it is not easy in 
every case to draw the line and decide what is and 
what is not a public purpose. He simply 
held that an issue of bonds in that particular 
case in favor of a single manufacturing company 
could not be said to have been for a public purpose, 
and it was on that point that he decided the case. 
What he said about granting bounties for private 
purposes is sound law and is not controverted, but it 
has no application to any act that has passed granting 
a bounty or an emolument for a public purpose. He 
said that the city of Topeka had no constitutional 
right to issue bonds to establish a bridge manufac- 
turing company; that that was no more for a public 
use and purpose than it was to establish a shoe fac- 
tory. The bonds were issued under the authority of 
a general act "to incorporate cities of a second 
class" and especially of an act "to authorize cities 
and counties to issue bonds for the purpose of build- 
ing bridges, aiding railroads, etc." The object of 



I03 

the bonds issued was to encourage the company in 
its design of establishing a manufautory of iron 
bridges in Topeka. The common council of Topeka 
issued the bonds and in an action by the holders on 
the coupons on the bonds for interest, there was a 
demurrer by the city which raised the question 
whether the legislature had power to enact the 
statute. A clause in the Constitution of Kansas said 
that "provision shall be made by general law for the 
organization of cities, etc., and their power of taxa- 
tion, etc., shall be restricted so as to prevent the 
abuse of this power." Defendant insisted that 
the issue of bonds violated this clause. That was 
the first proposition. And, second, it was held that 
the bonds were not for a public purpose. On the 
hearing of the demurrer the demurrer was held good 
and affirmed on the second point raised, that the 
bonds were not for a public purpose. 

The court notices the division of sentiment exist- 
ing in State courts on the proposition that legisla- 
tures have the power to authorize cities to lend their 
credit to build railroads, and concedes that the pre- 
ponderence of authority is in favor of the existence 
of that power. The court says: 

"In all these cases, however, the decision 
has turned on the question wdiether the taxation 
was for a public purpose. Those who came to 
the conclusion that it was, held the laws for that 
purpose valid. Those who could not reach that 
conclusion held them void." 

I read from his language: 

"In all the controversy this has been the turning 
point. It may not be easy to draw the line in all 
cases so as to decide what is a public purpose, in 
this sense and what is not. The courts can only be 
justified in interposing when a violation of this prin- 



104 

ciple is clear and the reason for its interference 
cogent.'- 

And the court said that in deciding whether "in 
a given case the object falls upon the one side or the 
other of this line they must be governed mainly by 
the course and usage of the government." 

What better guide can we have here, if there be 
doubts, when as I show that from the beginning of 
the Government these bounties have been advocated, 
they have been maintained, they have been paid; 
showing, as I believe I do, that under the Constitu- 
tion there is no distinction between protection by 
way of impost duty and protection by way of bounty 
as a constitutional question, not as one of policy; 
showing, as I believe I am safe in saying, that the 
usage and custom of the Government have been in 
the direction of this instance. That is the reason, 
as suggested by Mr. Justice Miller in this decision, 
w^hy this principle should be maintained. 

The court argued that while a benefit may have 
resulted to the local public of the town, it was not 
unlike the local benefit resulting from a loan for the 
erection of a saw mill (60 Maine, 124), or to aid 
persons in Boston to rebuild their houses lost by fire, 
or to aid private schools. (103 Mass., 74, and 24 
Wis., 350.) This is all there is of the opinion. It 
went on the sole ground that the bonds were not 
issued for a public purpose. No one disputes the 
soundnes of the principle here laid down; the con- 
troversy goes on over the question as to which side 
of the line any given case falls. 

The case of Parkersburg vs. Brown, 106 U. S., 
487, involved precisely the same point as 20 Wal- 
lace, the validity of municipal bonds issued in aid of 
a foundry and machine works and decided (p. 501) 
on the ground that it was not for a public purpose. 



105 

The same may be said of Cole vs. Lagrange, 113 
U. S., I. 

The Comptroller. Do you not think there is 
conflict between Judge Miller and Jere Black? 

Mr. Manderson. Oh, yes, a very decided con- 
flict. Judge Black goes to the extent of saying that 
Congress can give all the money it pleases to any- 
body for any purpose; and Mr. Justice Miller says 
it must be for a public purpose. I recognize that 
difference. I confess that, with an extravagance 
which is perhaps incident to my nature, my sym- 
pathies as well as my judgment are with Attorney 
General Black rather than with Justice Miller, but 
the last named would have had no difificulty with the 
question with which you are now struggling. 

I refer to a case in 19 Mich., p. 275-289. I shall 
not take the time to go over the opinion. It holds 
in general terms that: 

"Where exemptions or bounty is not for a specific 
time, it is either permanent or entirely under State 
control. It can be repealed by Legislature whether 
time for it to run is specified or not, but rights may 
arise under it to the individual who has advantaged 
himself of its provisions." 

I also refer to the case of Newton vs. Commis- 
sioners, 100 U. S., 548, which was a suit involving 
the question of the county seat in Mahoning County, 
Ohio, between Canfield and Youngstown, and does 
not militate in the least against our position here. 

I referred in opening, in giving somewhat the his- 
tory of legislation on this subject, to the fact that 
this was a time agreement; that the Congress of the 
United States said that until 1905 the payment of 
this bounty should continue to the sugar producers. 
They fixed in the original act a duration, a limit of 
the time for it to continue in operation. Now the 



io6 



object which Congress had was to attract capital and 
induce it to invest in an industry which this Govern- 
ment, following other nations, desired to see built up 
in this country. I know I am asking a very great 
deal of you, who are a busy man and this is the 
season of the year when one should rest, but I am 
going to leave this speech made by me in the Senate 
with you for your consideration, and hope that if you 
will read no other part you will read such history as 
there is here of the efforts that were made and of the 
sacrifices that attended the effort to embark upon the 
production of sugar from beets in continental Europe. 
There is no more interesting page of history — I do 
not mean that I have presented it in an interesting 
fashion — than that which recites the determined, 
Napoleonic effort of the great Napoleon to establish 
the sugar beet industry in France. And the great 
German nation, the admiration of the world in many 
respects, dominated as it is by wonderful power and 
dominated by a wonderful intellect, with a wide- 
spread intelligence, with an appreciation of tilings 
such as I suppose characterizes no other nation in 
the world — the great German nation, in its wonder- 
ful effort to produce the beet that has been so suc- 
cessful, gives to us a most interesting lesson. I said 
to Your Honor that the State of Nebraska in its effort 
to advance this tremendous interest had established a 
bureau of sugar beet culture. That bureau lias is- 
sued many bulletins. Here is a most interesting 
one. I present it to you not that it has any particular 
business with the matter which we are now discuss- 
ing, but as matter of interest in connection with this 
great question, the magnitude and importance of 
which few people comprehend. This is of the bul- 
letins of the sugar beet series. No. 7. 

The German government having made tremendous 



loy 

strides, so that from a production of nothing years 
ago it has at last reached the point where it supplies 
all of its own needs and the needs of many other 
parts of the world, this country included, saw the 
passage by the American Congress of this law of 
1890. The Germans are always alert and keen, and 
know what is being done elsewhere. When they 
understood that under the fostering care of that law 
certain beet factories had been started in Nebraska, 
they sent a German professor over here to spy out 
the land. He returned to his own country, and Dr. 
Max Hollrung, of Halle, Germany, made his report. 
A German at Grand Island, who had relatives abroad, 
obtained a copy of the original report made by Dr. 
Hollrung to his Government, and Professor Nichol- 
son, who is in charge of the experimental school or 
station in Nebraska, being himself a fair German 
scholar, translated it. I have it here. 

His report is characterized by that wonderful care 
and attention to details which characterizes about 
everything that the German undertakes, especially 
when he is working for his Government. This 
gentleman evidently spent much time in Nebraska. 
He gives the character of the State, he speaks of it 
as having only thirty years ago figured on the map 
as a part of what was called the Great American 
Desert. He gives the number of acres of land, 
48,000,000 acres of land in the State; he tells its 
characteristics by counties; he gives the nature of 
the soil by most careful analysis, showing in per- 
haps twenty different places here from analysis made 
by him the percentage of fine gravel, of course sand, 
of fine sand, of finest sand, of silt, and of organic 
matter. He did important service for us in thus 
acting for his Government. He gives the tempera- 
ture, the rainfall. He reviews all the natural con- 



io8 



ditions for establishing beet culture; he gives the 
history of the starting of the two factories at Grand 
Island and at Norfolk. 

The Comptroller. When were they started? 

Mr. Manderson. My recollection is that one 
was started in 1890 and the other in 1891. 

The Comptroller. After the passage of the 
McKinley bounty law? 

Mr. Manderson. Yes, sir. The Grand Island 
factory was perhaps started before the passage of 
the McKinley bill, and the Norfolk factory after- 
wards. The first factory at Grand Island was com- 
menced under the impulse of a State bounty of one 
cent per pound, but before the completion of the 
factory and before a pound of sugar w^as made, the 
State Legislature unfairly repealed the bill, actuated 
to do so probably by the Federal bounty promised 
in the McKinley bill. Both factories, however, 
were completed and made their sugar under the 
sugar bounty law of 1890. 

Mr. HoUrung speaks further of the cultivation of 
the land by the farmers, of the make-up and char- 
acteristics of the agriculturists, to a fraction of a cent 
what it costs for preparing the ground — harrowing, 
drilling in the seed, rolling, hand hoeing, machine 
hoeing, transplanting and thinning, loosening the 
beets, pulling, topping, etc. He goes into the 
question of manures, their cost and their necessity. 
He speaks of American labor, the price that is paid, 
giving statistical detail concerning it, and he shows 
the amount of beets produced and the amount 
realized in dollars and cents by those who produced 
them. No man could write a more exhaustive 
treatise upon the subject than that written by this 
German educator, procured to do so by the German 
government, alarmed by this threat at their chief 
industry. 



109 

I wish to read just one or two sentences, and I do 
it as part of a political argument on protection in 
the hope of converting you from the error of your 
political ways, even at this eleventh hour. [Laugh- 
ter.] 

Mr. Dodge. You had better address it to Sen- 
ator Caffery. 

Mr. Mandkrson. Brother Caffery was converted 
long ago. 

Mr. Caffery. What do you call conversion? 

Mr. Manderson. You are giving fruits meet at 
least for repentance if not showing conversion. 

Mr. Caffrey. I have not perceived it. 

Mr. Manderson. Now, what does Dr. Holl- 
rung say? 

"He who examined the long list of reports on an 
attempt to introduce the beet sugar industy in the 
United States since 1830." 

There have been many attempts made in this 
country that failed. They failed in Delaware, they 
failed in Illinois, they failed in Virginia. It was 
not until these people, educated abroad and carefully 
skilled, started with plenty of money to put in the 
enterprise, that they were able to produce sugar 
beets successfully. 

"He who examines the long list of reports on an 
attempt to introduce the beet sugar industry in the 
United States, since 1830, must be of the opinion, 
contrary to Professor Paasche" — 

Who was anotner German who came here and 
explored — 

"that this is not a private enterprise, calculated 
to flourish at the expense of the public, but a new 
impulse for making North America independent of 
the sugar import from foreign countries. The Mon- 
roe doctrine America for Americans, originally only 



no 



used in a geographical sense, has long ago been 
transferred to the fields of political economy." 

I have never heard any tariff orator who put the 
proposition of protection and the sentiment concern- 
ing it much better than that. 

"To be independent, independent in every way, 
to owe everything to one's self is the aim. the 
national pride of the American." 

I am glad that this observing German noticed that 
characteristic trait in some of us. I Avish it per- 
vaded all. 

"The McKinley bill is the expression of this sen- 
timent, and very strangely — " 

Now here is something that strikes this German 
with amazement and astonishment, and yet he ob- 
served a truth that you are bound to confess, al- 
though you do not want to. 

"The McKinley bill is the expression of this sen- 
timent, and very strangely we find that the American 
democrat is more a nominal than a real opponent of 
this republican creation." 

That is so, is it not? 

Mr. Caffery. Not in Louisiana. 

Mr. Manderson. The people of Louisiana are 
indeed very rapidly becoming protectionists. 

Mr. Caffery. You could not even with a bounty 
fool us on the doctrine of protection. 

Mr. Manderson. You wait. You will change 
your views and your ways, or your people in Louis- 
iana will repudiate you. This is a cause that grows. 
Dr.HoUrung goes on to say: 

"It is really immaterial to investigate in what way 
the American pursues his beet culture and beet sugar 
industry. The principal question for us is whether 
beet culture increases or not, and whether there is a 
prospect of its continuance." 



f 



III 



That is the point of interest for the German Gov- 
ernment. 

"x\ccording to the statement of the archives of 
commerce the tract of land planted with beets 
amounted in North America: 

1881 to 7,155 acres. 

1892 to 17,344 acres. 

The beet sugar production was: 

1889 5,170,000 pounds. 

1890 7,000,000 pounds. 

1891 12,000,000 pounds. 

1892 26,568,190 pounds. 

In 1893 it is estimated at 30,000,000 pounds. 

In 1894, an account of the failure by the drought, 
there was a decrease, and I think in 1895 there will 
probably be produced between forty and fifty million 
pounds. 

Mr. Dodge. Will you give me the figures for 
1893 again? 

Mr. M ANDERSON. I have not the figures for 
1893; I guessed at 1893. 

Mr. Dodge. About 30,000 acres? 

Mr. Manderson. No pounds; about 30,000,000 
pounds. 

Mr. Dodge. Can you give the number of acres? 
You spoke of 17,000 acres. 

Mr. Manderson. 17,000 acres in 1892. 

Mr. Dodge. Can you give the acreage in 1893? 

Mr. Manderson. As to acreage I can not tell. 
I think there was an increase of acreage in 1894, but 
a decrease of crop on account of the drouth. 

Dr. Hollrung proceeds: 

"This shows a slow but steady increase in beet 
sugar production; the latter, however, occupies so 
humble a position that its competition can hardly 
be said to be felt in Germany. The further develop- 



112 

ment of the American beet sugar industry prin- 
cipally depends on the ability of the sugar factories 
to keep up their payments of $5 per ton for beets for 
any length of time. They will do so as long as the 
Government pays a premium of two cents per pound 
of ninety per cent, sugar to the manufacturer of 
domestic sugar. If this premium is withdrawn with- 
out compensation, the beet root sugar industry of 
America will probably be ruined in spite of its 
present prosperous condition.'' 

But this is departing very materially from the mat- 
ter in hand. I w^as speaking of the time limit given 
to these people. The courts appear to attach im- 
portance to a statute containing a time limit. I 
quote in that regard 19 Michigan. A portion of the 
opinion that decided the Saginaw^ salt case in 19 
Michigan w^as devoted to a discussion as to the effect 
of the omission of a duration clause, and the case 
evidently went off on that point and on the point as 
to the danger of, and power to, exempt property 
from taxation. If this is not so, w^here the necessity 
of discussing it at length as Judge Cooley does and 
as was done on appeal? ( 15 Wallace, 373. ) The 
evident theory was that the act of 1859 having failed 
to give investors a promise of time, it was like any 
ordinary statute, repealable at any time and of course 
amendable at any time, and it was amended in 1861, 
so as to affect the plaintiff. Why did the courts 
addressing itself to the act of 1859, say that there 
was in it, "no pledge that it should not be repealed at 
any time?'' And why say that the act of 1859 did 
"not say how long the act should continue?" 

The negative conclusion to be drawn from all this 
reasoning is, that if a promise of a fourteen-year exemp- 
tion or payment had been held out, the power to dis- 
turb it would not have existed; that such a clause 
would have made it a contract, or something in the 



nature of one, as to all those who invested. In 
other words it would then, to use the language of the 
court, have been something more than "a mere 
bounty law," repealable at anytime as to those only 
who had invested on the faith of the time promise 
and the bounty agreed to be paid. 

If there is no legal signification to be attached to 
the statutes fixing a time limit, why insert it? Is it 
a mere fraudulent inveigling device, to be used by 
Congress or a legislature to attract benefits or secure 
advantages, only that men may be plunged into dis- 
tress and bankruptcy? It ought not to be the law 
that snares and pitfalls may be laid and dug for cap- 
ital at the pleasure and caprice of legislative bodies, 
the acts of which concern the public welfare, and 
affect the honor of the State. The act of 1890 was 
an open and avowed invitation to capitalists to come 
forward and invest their money on the promise held 
out to them. It was a solemn pledge so far as one 
Congress can bind another, that if the sugar plann- 
ers and the beet and sorgham people would hazard 
new capital; would consent to risk their money in 
the meritorious national object of developing the 
sugar industry. Congress would perform its promise^ 
and not punish them for their credulity and their 
manly efforts to comply with their part of a statute 
which contained all the elements of a contract. 

I quote from 3 Dallas, page 394, using the lan- 
guage of the court: 

"It is not to be presumed that the Federal or 
State Legislatures, will pass laws to deprive citizens 
of rights vested in them by existing laws, unless for 
the benefit of the whole community and on making 
full satisfaction." 

That is what prompted Congress in the act of March 
2, 1895. It proposed, it believing it for the benefit 

8 



114 

of the whole community to abandon this bounty, 
that it would give to those who would have been the 
recipient of the bounty, full satisfaction for the 
departure from the bounty. 

I desire here, as bearing somewhat upon this 
question, to quote from President Fillmore, who, in 
1842, said: 

"I make a distinction between encouragement and 
protection of manufactures. It is one thing for the 
Government to encourage its citizens to abandon 
their ordinary pursuits and engage in a particular 
branch of industry, and a very different thing 
whether the Government is bound to protect that 
industry by laws similar to those by which it en- 
couraged its citizens to embark in it. In the first 
case, there is no obligation on the part of the Govern- 
ment. Its act is entirely voluntary and spontaneous. 
It may, or may not, encourage the production or the 
manufacture of a particular article as it shall judge 
best for the whole community. Before attempting 
it, the Government should w^eigh well the advan- 
tages and disadvantages likely to result to the whole 
and not to the particular class which may be tempted 
to engage. If a particular branch of industry is so 
important in its bearings upon the public wants, on 
account of its providing in time of peace for some 
necessary article in time of war, then the Government 
may and should legislate with a view to encourage 
its establishment. When the Government has 
decided that it is best to give the encourage- 
ment and the citizen has been induced by our 
legislation to abandon his former pursuits and to 
invest his capital and apply his skill and labor to 
the production of the article, thus encouraged by the 
the Government, then a new question arises, for 
another party has become interested, and that is 
whether we should by subsequent legislation have 
withdrawn our protection from the citizen, whom we 
had thus encouraged to embark his all in a particular 
branch of business for the good of the public, and 
threaten him with bankruptcy by our unsteady, not 



115 

to say perfidious legislation. Our act in the first 
instance was free and voluntary. We might give 
the encouragement or not, but having given it the 
public faith to a certain extent was pledged. Those 
who accepted our invitation and embarked in new 
pursuits, did so under the promise on our part that 
the encouragment thus given should not be treacher- 
ously withdrawn and that we would not tear down 
that which we had encouraged them to build up. 
This is the just, clear and broad distinction between 
encouragement beforehand and protection afterwards. 
The former is voluntary, depending wholly upon 
considerations of public policy and expediency, the 
latter was a matter of good faith to those who had 
been tempted by Congress to trust to the national 
honor." 

While it might be conceded that the law of 1890 
was not for the full unexpired time or until 1905, a 
contract, yet the question would remain, whether 
under its provisions and fair construction, after accept- 
ance thereof by investment, annual issuance of 
licenses and filing of bonds, a contract did not arise 
for the year 1894. 

The Comptroller. That is, provided the act in 
itself was valid. 

Mr. M ANDERSON. Of course; provided the Su- 
preme Court of the United States shall not declare the 
law a nullity by saying it is unconstitutional. 

Basing this claim on the legal effect of a license, 
there is more or less authority at hand to show that 
the last Congress thought it irrevocable for the year 
1894, because not all licenses are revocable under all 
circumstances and at any time. 

I quote from 14th Serg. and Rawle, 267-272. 

A license may become an agreement for valuable 
consideration, as where the enjoyment of a license 
must necessarily be preceded by the expenditure of 
money, where the person licensed has invested capi- 



ii6 



tal on the faith of it. In such a case the licensee 
becomes a purchaser for valuable consideration. 
Such a license is a direct encouragement to expend 
money, and it is against all conscience to annul it as 
soon as the benefit expected from the expenditure is 
beginning to be seen. The expenditure of money 
turns the license in an agreement in equity. I quote 
from 14 Serg. and Rawle, stipi^a. 

That is precisely what the law promising the 
bounty and the issuance of sugar licenses did, and 
large sums were invested on the faith of previous 
payments and the law and licenses of 1894. The 
licenses were for specific periods and the producers 
could only be remunerated by enjoying the benefit 
of the license, through the relief which Congress 
granted in 1894. (4 Watts Rep., 317.) 

Factories had been erected, money invested in 
land, material and supplies; contracts had been made 
for the raw material on the bounty basis and Congress 
felt that it had no right to falsify the expectations 
which it had created. (5 Maine, 9; 7 New Hamp.^ 
237; II N. H., 102; 15 Ohio, 247; 19 Indiana, 10.) 

Such is the reasoning also in the bridge case in 
105 U. S., 470. The court there regarded the act 
of Congress authorizing the construction of a bridge 
over the Ohio as a license, revocable, however, in 
that particular case without liability for damages. 
This was so held, however, only because of the 
wording of the reservation of power to withdraw the 
consent or revoke the license contained in the act of 
March 3, 1869, which was before any money had 
been expended. 

A resolution of Congress contained the license to 
bridge with a certain span and in a certain way: 

"But Congress reserves the right to withdraw its 
assent hereby given in case the free navigation of 



117 

said river shall at any time be substantially and 
materially obstructed by any bridge to be erected 
under the authority of this resolution, or to direct 
the necessary modifications and alterations of said 
bridge." 

After the passage of this resolution a company 
began the construction of a bridge and expended a 
large sum of money, and two years after the passage 
of the resolution (March 3, 1871), a law was passed 
by Congress making it unlawful for the company to 
proceed unless certain things were done which largely 
increased its cost and power was given the company 
to file a bill in equity to determine — ist: whether the 
bridge, down to 187 1, had been constructed accord- 
ing to the act of 1869, and 2d: to ascertain the liabil- 
ity of the United States, if any, by reason of the 
change ordered made. 

The company completed its bridge and filed its bill 
which was dismissed and on appeal aflfirmed. But 
that decision went on these grounds that the liabil- 
ity for damages being the controlling question and 
the power to revoke the license to build having been 
■expressly reserved, upon Congress was thrown the 
sole power to determine whether the requirements 
were all that due protection for free navigation 
demanded; that Congress might in its discretion, 
have ordered an investigation, but not having done 
so, its power was supreme under the reservation of 
power; that the license was given only on condition 
that it might be revoked at any time, which made 
the company assume all risks accidents to a revocable 
license. It was a risk, under such a law, voluntarily 
assumed. Congress might abuse the power it had 
expressly reserved, but it would be doing so under 
the limits prescribed by it, in the act of 1869. 

It is quite clear from the opinion in this case that 



, ii8 

a license in a general law such as is found in connec- 
tion with the act of 1890, was binding and irrevoc- 
able after investment of money and issuance of the 
license, during the time it had to run. Congress 
recognized this as good law in the act of 1894. The 
court said, referring to the act of 1871: 

" Congress fully recognized the obligation resting 
upon every government, when it is guilty of a wrong, 
to make a reparation. Exemption from suit does not 
necessarily imply exemption from liability." 

It held that by the act of 1871, Congress gave the 
court power to determine whether it had done a 
wrong, and the court held, " no," because it had not 
exceeded its reserved power to revoke the license; 
hence that there was no liability by suit in that case, 
whatever equity there was to ask Congress for an in- 
quiry and damages. Even in that case Justice Mil- 
ler wrote a very strong dissenting opinion, holding 
that the court had the power to ascertain the dam- 
ages. Justice Field held that the change required in 
the construction of the bridge and the revocation of 
the license was spoilation; that there are many ways 
of taking property other than by appropriation, that 
were within the constitutional inhibition. Mr. Justice 
Bradley also dissented. 

It will be noted the case was decided on the point 
of the reserved power to revoke at any time. But, 
for that power, it is quite clear that the court would 
have held the license to build irrevocable. There 
was no power to revoke reserved in the act of 1890, 
during the time the licenses of 1894 had to run. 

This much then on the point as to the liability of 
the Government under the license feature of the act 
of 1890. It goes upon the legal theory that if the 
Government had sovereign power to annul the law 
of 1890, yet as to licenses granted in 1894, and as to 



119 

applications therefor and bonds in due form on 
file, the licenses were irrevocable and the Govern- 
ment was legally or equitable bound, and Congress 
by the act of 1894 so legislated. Standing alone, 
the bare license might not provoke this liability, but 
taken in connection with the promise contained in 
the law and the investments made under both, the 
element of irrevocability attached to the license for 
the period granted, and in equity this principle 
should apply to licenses applied for, and bonds filed. 

That Congress may make contracts will not be 
questioned. Without this power it would be de- 
prived of sovereignty and without its exercise it 
would be very diiBcult to conduct its ordinary admin- 
istrative affairs. (3 Peters, 1 16-127; i6th Howard, 
389-428.) 

The line of reasoning adopted in the Ohio bank 
cases is apparently adopted in Calder vs. Henderson, 
54 Federal Reporter, p. 804, where the court says: 
" When a producer of sugar accepts the offer and 
complies with the statute, it would seem to be as 
much a contract as it is possible for any citizen to 
make with the Government. All the elements of a 
contract are present — the terms, the consideration 
and the lawful object." 

This being so there is no limit on the exercise of 
that power, except that found in the fundamental 
law% or where considerations of public policy inter- 
vene under the common law. (16 How., U. S., p. 
429-430-431; 7 Cranch., 164; 3 Dallas, p. 388.) 

The general rule is that one legislature may re- 
peal any act of its predecessors, and that one legis- 
lature may not abridge the power of a succeeding 
one, but the exception is, that if an act be done 
under a law, a succeeding legislature cannot undo 
it. Where the law is in its nature a contract, as 



120 



the bounty law was, a repeal of that law will not 
divest rights. (6 Cranch., p. 135; 54 Federal Rep., 
p. 804. ) 

In this case beet sugar had been produced prior 
to repeal, and as to both cane and beet sugar for 
1894, investments had been made, licenses granted, 
bonds filed and large sums expended to grow a crop 
on the faith of previous payments and the law and 
licenses. Between individuals the bounty law 
would have been binding as a contract, as well as 
by way of license during 1894, and common law 
rules govern it. (12 Wheaton, 559.) 

There are acts which the Federal or State legisla- 
ture cannot do without exceeding its authority. 
There are certain vital principles in our free repub- 
lican Government, which will determine and over- 
rule an apparent and flagrant abuse of legislative 
power; as to authorize manifest injustice by positive 
law. The restraining power on Congress or a State 
legislature need not be expressed. Certain acts 
would be infractions of the genius, nature and spivit 
of the common law, and of reason and a sense of 
justice, as well as of the Constitution. (3 Dallas, p. 
388.) As the courts well say, there ought to be 
some restraint somewhere on legislative power or 
disposition to break contracts and bring down severe 
losses on the heads of those whom it has ensnared by 
legislation. (6 Cranch., 67-135; 4th ed. Story eq. 
juris., sec. 1399.) 

There is no limit to the exercise of the power to 
contract except that found in the fundamental law or 
in that which is founded on public policy or imbeded 
in the common law. Contracts may bind succeeding 
legislatures. (16 How., supra, 329-430-431; 7 
Cranch., 164; 3 Dallas, p. 388.) And this is so 
even if the contract works a public injury. (16 
How., supra, p. 429.) 



121 

Whether a contract, in any given case, should be 
made, is a matter for the exclusive consideration of 
Congress, and it is the exercise of its undoubted 
power of sovereignty when one is made. ( i6 How., 
U. S., p. 428.) 

The question is, are the words used, words of con- 
tract; is the language in the nature of a contract? 
In determining this question it makes no difference 
whether the instrument is in the form of a law, or of 
a covenant, or agreement of an agent acting for the 
Government. (16 How., U. S., p. 433; 54 Federal 
Reporter, p. 804. ) And the contract may be em- 
braced in a general as well as in a special law, as was 
the case just cited from 16 How., Rep. 

Now what was the issue in the case of the Ohio 
bank cases, 16 How., U. S.? The contest waged 
was over the legal effect of section 60 of a general 
banking law passed in 1845, which provided that 
every company accepting its provisions should set 
off six per cent, of its net profits, the same to be in 
lieu of all taxes to which the company would other- 
wise be liable. In 1851 a general act was passed 
making banks pay the same taxes as other property 
which rate was in excess of that provided in 1845. 
Quere, was the bank liable to be taxed under the act 
of 1 851? Held not; that the general act of 1845 was 
special as to, and a contract with, each bank accept- 
ing its provisions. The court said: "Every valu- 
able privilege given and which conducted to an 
acceptance of it, is a contract that cannot be changed, 
where the power to do so is not expressly reserved. 
It is a consideration not to be overlooked. The law 
is otherwise as to public corporations, municipal, 
etc. This is a vital distinction." 

Our sugar producers are private individuals or 
private companies and why is not the same rule 



122 



applicable? The banks were granted privileges, 
valuable or otherwise, depending on circumstances 
and so were the producers of sugar. 

It is said there must be a consideration for contracts. 
Grant it. What did the banks give? They simply 
agreed to give the community a sound and stable 
(money) circulation. That was a public and not a 
private benefit. The basis of the law of 1890, the 
implied contract contained these considerations 
moving to the public from the producers; that if 
they would more largely invest their money in the 
domestic sugar industry, thereby accelerating an 
increased production, which would naturally tend to 
cheapen a household necessity, keep some of our 
gold sent abroad annually for it at home, diversify 
agriculture and give labor employment, a bounty 
would be paid. These were the implied public con- 
siderations and they were jusi as valuable, and 
rested no more in mere promise, as the increase in 
domestic sugar production has disclosed, than was 
the promise to furnish a sound stable quantum of 
circulating notes. When the banks accepted the 
privileges granted, to make money, a contract arose 
and the tax rate attached as a part of it. When the 
sugar producers invested their money, took out 
licenses and filed their bonds a contract arose. By 
the act of 1894 Congress recognized it and has 
directed payment. The act of 1890 went upon this, 
that to secure results desired by the Government, 
inducements must be held out. In the case of the 
banks, their privileges or chances to make money 
were limited to twenty years, the time specified by a 
general incorporation law. In the case of the sugar 
producers the time granted them was fixed at four- 
teen years. Time and the tax rate (on conditions) 
were the inducements in the one case, and time and 



^23 

the bounty giirantee (on conditions) were the induce- 
ments in the other case. A sound currency was 
desirable in the interests of the public, and our 
annual drain of gold for foreign sugar, cheaper 
sugar, and suppression of "surplus" revenue were of 
public concern. 

Besides the considerations moving to the people, 
above stated, there was connected with the bounty 
law, as a part and parcel of it, section three of the 
McKinley act. Under those agreements, our farmers 
and manufacturers secured foreign markets in rival 
sugar-producing nations for over $40,000,000 of our 
products in excess of what we would have had but 
for those agreements. This alone was ample con- 
sideration for the bounty law. It enabled our tax- 
payers to cancel the whole bounty paid, with over 
$15,000,000 remaining; and our people were able, 
in the reduced price of their sugar, to keep in their 
pockets over $150,000,000 — compared with the duty 
policy which had prevailed for over a century. The 
value of theconsideration, which accrued under the 
bounty law or free sugar policy is now fully appre- 
ciated by our cattle and meat interests. The free 
sugar law was the basis of our reciprocity agreements 
and they fell with a repeal of a bounty law. It is of 
interest to note that the value of the agreements is 
placed at $75,000,000 per annum with Europe alone! 

In the Ohio bank cases, as often as the tax rate 
was lessened to favor a bank and serve the public, 
increased taxes were thrown upon others; and so 
money from Texas was taken for the bounty — in 
return however for which the people got cheaper 
sugar and saved far more than the bounty cost. No 
bonus or money consideration was necessary. (16 
How U. S., p. 390-1.) 

It will not do, therefore, to say that there was no 



124 

consideration for this bounty law, contract or agree- 
ment, nor will it do to say that the money raised to 
liquidate it was for a private and not a public 
purpose. 

I have a large amount of material here, some 
of which I have already used and have enlarged 
upon, and other matter that is of a new character 
which I would gladly present, but with your per- 
mission, as I can present it very quickly in type- 
written or printed form, and as I feel that I am 
wearying you and know very well that I am 
wearying myself — 

The Comptkoller. Take your own method. 

Mr. Manderson. I shall, with your leave, add 
much of this matter to my remarks, and will insert 
it here. 

What were the primary or leading objects of the 
so-called bounty paragraphs, the "free raw sugar 
clause and section 3 of the tariff act of 1890, for 
they all go to make up the unit of the policy? 
Was it to simply pay our domestic sugar producers 
one and three-fourths and two cents per pound? Not 
at all. That was only an "incidental' ' feature of 
the whole policy. There was a "surplus'' of revenue 
and Congress took this, as one method, of reducing 
taxation. And it desired to do this without crip- 
pling a national industry of great public importance 
to the nation and so, as Mr. Carlisle said, "as a com- 
pensation" for the encouragement to sugar which 
duty had given, this policy was adopted. 

But that was only one feature of the unit in a 
policy which was broad and comprehensive, its chief 
feature being commercial. We also desired to bring 
sugar production at home as rapidly as possible up 
to the point of furnishing a home supply, and so 
keep our over $100,000,000 of gold here which we 



12 



were sending abroad annually for foreign sugar; to 
cheapen the price of sugar, to diversify agriculture, 
and, above all, to open wider the doors of foreign 
markets to our agricultural and other products. 
Section 3 of the tariff law, in connection with the 
bounty, and the "free" Taw sugar paragraphs, 
enabled this country to lay the foundation for us to 
obtain reciprocal commercial agreements. 

Congress, 7iot for the first time, was seeking im- 
portant commercial advantages with foreign nations. 
(See 143 U. S. Rep., 685, etc.) To attain these, 
" free " sugar became the basis of a legislative policy. 
Reciprocity in turn was based on that policy. The 
desired power under which Congress sought to ' ' regu- 
late commerce " zvould not exist without Sec. 3, 
known as the reciprocity clause of this sugar or com- 
mercial policy, and the enactment of the whole unit 
was the lawful exercise by Congress of its power to 
"regulate commerce," and Sec. 3 has been declared 
constitutional by the highest court. 

(Fields vs. Clark, 143 U. S. Rep., p. 694.) 

The power in Congress to " regulate commerce " 
is expressly granted, and here was an exercise of that 
power — in such a way as Congress deemed best. We 
submit that it is not for courts even to pick such a 
policy to pieces and destroy it, because forsooth 
political or economic differences exist as to the wis- 
dom of a part of it. The courts have no right to say 
that Congress shall not — in order to attain commercial 
objects, order seven or ten millions or any other sum 
paid out, in pursuance of its direction and its power 
"to regulate commerce." And if courts shall not 
do so shall an officer of the Executive Department? 

What is the limit on the power of Congress in re- 
spect to the application of taxes, raised by constitu- 
tional legislation? May not Congress, in pursuance 



126 

of its power "to regulate commerce" make sugar 
"free" and maintain its domestic production, in 
order to put itself in a position to be able to enter 
into commercial agreements with foreign nations? 
May the judiciary or the Executive interfere with 
the legislative prerogative, sit in judgment on the 
wisdom of the act or the methods employed to 
accomplish great commercial results? The policy 
embraced in this is a unit, and its parts cannot be 
separated. May the judiciary invade the domain of 
the legislative branch of the Government and say 
that a part of the method which Congress has 
adopted to regulate commerce by obtaining recipro- 
cal commercial advantages in a certain manner, is 
unconstitutional because a part of the law to carry 
out its policy appropriates seven, nine or ten mil- 
lions of money to our own people in lieu of the 
former burdens they had carried of fifty millions of 
taxes annually levied on sugar? May the courts 
indirectly, enter upon the legislative domain and 
attack legislative discretion and break down its 
policy and its lawful exercise of power? If courts 
cannot do this surely the Executive cannot. 

Courts are chary, as Justice Miller has well said, 
of interfering with legislative enactment unless 
there is a clear violation. 

It will not do therefore to say that the object of 
this payment of money to producers of domestic 
sugar is to enrich them and that such was the only 
object of the sugar schedule in the tarriff law of 
1890. That would be a very narrow view to take of 
the subjects embraced in the law, worthy only of the 
hustings. Let me repeat — 

We were sending a very large amount of gold, 
or its equivalent, abroad for foreign sugar, annually, 
over $100,000,000, and it was hoped that under the 



127 

new and stimulating policy, this country would 
gradually become able to produce its own sugar from 
cane, beets and sorghum. Under a similar policy, 
Germany, France, Austria and Russia had come to 
be exporters of sugar, why not this country? We 
have the soil and the climate. 

Tea and coffee had become "free" — why not sugar? 
Hence raw sugar was placed on the free list and 
instead of the protection which I^ouisiana had had 
by a two cent tax or duty, the bounty policy was sub- 
stituted as the encouragement for sugar production, 
especially in view of what the (new) beet sugar 
industry promised. 

It gave the people cheaper sugar — sufgar at five 
cents per pound which had been costing them seven 
to eight cents. The saving in this regard was equal 
to $50,000,000 per annum for three years. 

Attached to the bounty policy, and as an integral 
part of it, was the reciprocity clause in the act of 
1890, under which it was proposed to give our 
farmers foreign commercial advantages. This clause 
was as much a part and parcel of the sugar policy — 
although the clauses were separated in the act — as 
any other of the paragraphs of the sugar schedule. 
If one fell, the other necessarily went with it. The 
importance of this feature of law was either not 
understood or not appreciated. Because the re- 
ciprocity provision was a part of the sugar schedule 
— for it could not be utilized but for "free" sugar, it 
is proposed to briefly refer to the conditions that 
existed, to show its importance, proving that pay- 
ment of a bounty to our sugar producers was not all 
that Congress had in view in enacting the sugar 
schedule of 1890. May 6, 1883, Germany issued a 
"sanitary" decree prohibiting the entry of our pork, 
hogs and sausage. For eight years, in spite of our 



128 

best diplomatic efforts, our pork, and other meats 
were by this measure exduded by Germany and 
given, by this decree, a bad name among other 
nations. October — , 1890, Congress passed a tariff 
law, Section 3 of which armed the President with 
power to exclude German beet sugar, if that country 
did not allow our producers fair and equal privileges. 

August 30, 1890, Congress passed another act, 
Section 5 of which gave the President additional 
power; retaliatory power. 

March 3, 1891, Congress passed the meat iiispec- 
iioji act. 

Now mark what followed — the evidence of which 
is found in Senate Ex. Doc, 119, 52d Cong., ist 
session. 

August 22, 1891, the German embassador wrote 
Mr. Foster, our special minister, saying. 

That because of our meat inspection act and regu- 
lations thereunder, there was no longer need of her 
prohibitory decree, and that as soon as Germany 
was officially advised that our inspection law had 
taken effect, the prohibition on our meat would be 
removed. And he further said: That when Ger- 
many had removed her decree against our meat, he 
assumed the President would not exercise the powers 
given him under Section 3 of the tariff act of 1890, 
nor those conferred on him by Section 5 of the act 
of August 30, 1890. (See Public Acts, 247 and 330, 
of the 51st Cong., ist Sess.) 

The German embassador also said that he based 
this assumption on the ground that Germany was 
prepared to grant the same tariff reduction to the 
United States on agricultural products as had then 
already been granted by Germany to Austria. 

Here then were two propositions: 

ist. A promised withdrawal of the decree against 
our meat because of our inspection law; and, 



129 

2d. If we would not enforce Sec. 3 of the tariff 
law of 1890, and Sec. 5 of the act of August 30, 
1890, Germany wo-uld let in our agricultural pro- 
ducts on the same terms that Austria's had been let 
into Germany. 

This letter was answered promptly by Mr. Foster, 
August 22, 1 89 1. He stated that in view of Ger- 
many's promise to annul her meat edict against 
the United States, in consequence of our inspection 
act; and in view of the statement that Germany 
would grant us tariff reductions if the President 
would not enforce Sec. 3 of the tariff law of 1890, 
and Sec. 5 of the act of August 30, 1890, he (Fos- 
ter) would say that our meat inspection law would 
take effect September i, 1891, and the President 
(because of promised tariff reductions by Germany) 
would not exercise his power under Sec. 5 of the 
act of August 30, 1890. And then, as to Sec. 3 of 
the tariff law of 1890, Mr. Foster said that as soon 
as the United States was advised of (xermany's tariff 
reductions on the indicated articles, the articles 
mentioned in Sec. 3 of the tariff law of 1890, would 
be ordered to be continued '' free." 

December 10, 1891, the German minister trans- 
mitted the table of tariff concessions granted by 
Germany to Austria which showed the reductions 
made to Austria, and those articles also on which no 
higher duties were to be levied by Germany during 
the treaty; to go into effect February i, 1892. 

We will not now stop to inquire, nor to argue who 
got the best of this bargain. We know that our ex- 
port trade to Germany ran up as follows: 

1889— total exports from United States 868,000,000 

1890— total exports from United States 85,500,000 

1891— total exports from United States 92,200,000 

1892— total exports from United States 105,500,000 

9 



130 

The point not to be overlooked in all this, is, that 
this correspondence shows that Germany withdrew 
her prohibition or "sanitary" decree of 1883 against 
our meats on the ground that we had provided by 
law and regulation against all fear of diseased or un- 
wholesome meats, and because (evidently) of the 
fear that we would call into action Sec. 5 of the act 
of August 30, 1890 and also Sec. 3 of the tariff act of 
1890. 

To prevent the latter, she would and did agree to 
reduce her tariff on articles coming from the United 
States. 

The two propositions while seemingly connected, 
stood really on separate and distinct grounds. Our 
inspection law and regulations overthrew her pro- 
hibitory decree of March 3, 1883, and 

2nd. The fear that we would exercise our power 
under Sec. 5 of the act of August 30, 1890, and Sec. 
3 of the tariff act of 1S90, induced Germany to give 
us the samiC tariff concessions given to Austria. 

In the "memorandum" of July 16, 1894, from the 
Imperial German Embassy, Senate Ex. Doc. 58, 3d 
Sess., 53d Cong., it is stated that it is generally 
believed in Germany "that the United States, in the 
(reciprocity) agreement of August 22, 1891, guar- 
anteed exemption to Germany from the duty on 
sugar, in return for the concession of the conven- 
tional duties on American agricultural products, and 
the removal of the restrictions on the importation of 
swine," by the United States into Germany. {See 
Me)n . ) 

The courts even have no right to invade the 
domain of legislative power and discretion and break 
down a commercial policy such as was embraced in 
the law of 1890, much less the executive. 

In pursuance of a reciprocal agreement we have 



given Hawaii, indirectl)', a boioiiy by remission of 
duty on sugar, equal to $50,000,000. It has been 
done under the power in Congress "to regulate com- 
merce." 

If the question supposedly involved here had not 
been thrust forward as an issue between political 
parties, no sort of doubt would be entertained as to 
the power of Congress to order money paid for any 
purpose it thought proper. The whole policy was 
one indivisible unit, and its parts could not be sepa- 
rated. 

The Congress of 1894, which ordered this money 
paid, understood the whole question. It was a body 
presumably opposed to the policy of the original 
enactment. It contained some of the ablest lawyers 
in the country. In the light of all these things, it 
solemnly indicated its pleasure. There is no legal 
evidence to indicate what considerations of a public 
character provoked it to enact the legislation of 
1894 as a compromise of the matter. It was a sol- 
emn legislative adjudication of the question, and like 
the celebrated "compromise" tariff act of 1833, all 
men should respect it, nor over-zealously seek its 
overthrow it by indirection. 

Prior to the repeal of the act of 1890 the adminis- 
trative officers of the Government, with the aid of 
the Attorney General, had the power to refuse to 
issue licenses or in some other way to test the ques- 
tion supposed to be at issue. Larger sums than 
those involved were paid out without question. 

"A proper respect for a co-ordinate branch of the 
Government requires the courts (even) to give effect 
to the presumption that Congress will pass no act 
not within its constitutional power." Lack of 
authority must be clearly demonstrated. (106 U. S. 
Rep., p. 635.) Sedg. on Stat, and Const. Law, 592. 



132 

To hold an act of Congress unconstitutional such a. 
construction must be unavoidable. (3 Peters, p. 448.) 

Can it be fairly said that this act is clearly uncon- 
stitutional; that there is no doubt about it; that such 
a conclusion is unavoidable? 

The Comptroller should be guided by the same rules 
that the courts are and no personal theory of econo- 
mics should guide his determination. In 12 Wheaton, 
213, it is said — 

"If I could rest my opinion in favor of the con- 
stitutionality of a law * * * on no- 
other ground than the doubt, so felt and acknowl- 
edged, that alone, in my estimation would be a 
satisfactory vindication of it. It is but a decent re- 
spect due to the * * * legislative 
branch by which any law is passed, to presume in 
favor of its validity, until its violation of the con- 
stitution is proved beyond all reasonable doubt. 
This has always been the language of this court." 

In 99 U. S. Rep., 700, the court said — 

, "Every possible presumption is in favor of the 
validity of a statute, and this continues until the 
contrary is shown beyond a rational doubt. One 
branch of the Government cannot encroach on the 
domain of another without danger." 

"To be in no doubt, is to be resolved, and the 
resolution must support the law." (Thayer's cases 
on Const. Law., Vol. i, p. 174.) 

To sum up the matter and see what the result of 
the contention here might be. 

Congress passes an act^ to which the President in 
office is a party. It is a law until set aside by the 
proper tribunal. Any other theory would mean 
chaos, anarchy and civil strife. Not every man may 
assume to say, "that law is unconstitutional and 
heiice there is no law." Seventy millions of people 
would thereby clothe themselves, each for himself, 



^33 

^itli judicial power. This theory is usurpation. It 
defies the Constitution which lodges power in a 
tribunal to discover not only what the law is, but 
whether a statute violates the fundamental law. It 
is probably true that, in an extreme case, the Presi- 
dent, the executive head of the nation, sworn to 
obey the Constitution and enforce the laws, may as- 
sume in the first instance to act or neglect to act as 
if a statute was unconstitutional. He may even defy 
a judicial interpretation, being responsible only by 
way of impeachment,' or to the people at the ballot 
box, but this rule does not apply to his subordinates, 
who are only answerable by removal from office, in- 
<lictable, or answerable in damages. But Congress 
has power over them, and over their offices. It may 
abolish the office or clothe some other subordinate 
with the power entrusted to the refractory or an- 
archistic offender. But for such an officer to say, 
*' there is no law," because, in his judgment it is 
"unconstitutional" would place the officer in this 
case, not only in the attitude of defying a Congres- 
sional mandate, but in the position of questioning a 
scatute which the very power which appointed him 
has decided to be constitutional. The error which 
some labor under, is in assuming that this is a case 
in which the Comptroller is guarding the Treasury 
against a private claimant. On the contrary, the 
very moment the issue of "constitutionality" is 
raised, it becomes an issue between the legislative 
and executive branches on the one side, and the 
Comptroller on the other. 

Judge Ranney in i Ohio State Rep., p. 83, puts 
the law this way: 

"The legislature is of necessity, in the first instance, 
to be the judge of its own constitutional powers. 
Its members act under an oath to support the Con- 



134 

stitution, and in every way under responsibilities as 
great as judicial officers. Their manifest duty is, 
never to exercise a power of doubtful constitution- 
ality. Doubt in their case, as in that of the courts, 
should be conclusive against all affirmative action. 
This being their duty, we are bound in all cases, to 
presume they have regarded it; and that they are 
clearly convinced of their powder to pass a law before 
they put it on the statute book. If a court, in such 
a case were to annul the law, while entertaining 
doubts upon the subject, it would present the absurd- 
ity of one department of the Government, over- 
turning, in doubt, what another had established, in 
settled conviction." 

Citing 3 Dallas, 171, 
4 Dallas, 14, 
8 Cranch, 87. 
If it be doubtful whether the legislative power has 
exceeded its limits, the judiciary (even) cannot 
interfere, though it may not be satisfied that the act 
is constitutional. 

2 Monroe (Ky.), 178. 

It is sufficient to establish the existence of a law 
to find it on the records of the State. 

3 R. I. Rep., p. 121. 

A statute is presumed to be constitutional. 

65 Ala., p. 197. 
The mind must be clearly convinced to the con- 
trary. 

65 Ala., p. 197. 
The burden of proof is on him who asserts its 
unconstitutionality. 

34 Ala., p. 321. 
As to the measure of proof necessary to set aside a 
statute, the cases are not agreed. In some cases it 
is said that the expressed will of the legislature 



135 

ought not to be disregarded, unless the unconstitu- 
tionality be clearly demonstrated. 

6 Cranch, Sy; 3 Denio, 381. 

3 Selden (Ky.), p. 109; 26 Wend., p. 606. 

In another case it is said that we should not hold 
that the legislature had exceeded its powers except 
in cases admitting of no reasonable doubt. 
Cases supra. 

At all events — that an act is "unconstitutional'^ 
must be clear. In Morris vs. The People, 3 Denio, 
supra, Senator Lott of the Court of Errors in New 
York, said: "An act of the legislature cannot be 
set aside as unconstitutional unless its incompati- 
bility with the Constitution is manifest and une- 
quivocal. 

And yet in spite of this uniformity of testimony 
we stand here as though the burden of proof was 
upon these claimants to show to a subaltern execu- 
tive officer that an act of Congress that he has sworn 
to enforce is not a nullity. 

The position would be comical if it were not so 
serious. 

I feel that I am not inexusable for having occupied 
as I have the entire day. Had there been afforded 
me more chance for preparation I could have made 
my argument much more concise and I think more 
forcible. I have presented to Your Honor the con- 
siderations that move me to my belief. I cannot 
deem it possible that all precedents are to be thrown 
to the winds and that a new, startling, and as I 
believe, most dangerous precedent is to be estab- 
lished by yourself. I shall not repeat what I have 
said with reference to what I apprehend to be the 
grave dangers besetting any such new departure. I 
believe them to be most serious, serious not only 



136 

because of the interests directly involved in this con- 
troversy, but as threatening a usurpation of power 
never contemplated by the framers of the Govern- 
ment of the United States. I have every confidence 
and not the least distrust that when Your Honor 
shall come to consider the great, the most important 
question here, the question of your power, you will 
see that its enlargement is more than a matter of 
personal inconvenience, it is more than the mere 
adding to you of the cares and responsibilities of 
place. It is starting upon a new road that leads to 
dangers which no man can describe, that I believe 
would lead to disaster that would be national in its 
character and destructive of the very best interests of 
the Government of the United States. I leave 
further argument to my associates, thanking them 
for the courtesy that they have afforded me in thus 
opening the case and thanking you for the courtesy 
and kind attention you have shown. 

The Comptroller. If I understand your propo- 
sition correctly in regard to the jurisdiction of the 
question, it is this: that when Congress has passed 
an act, and that act has been submitted to the 
President for executive approval, and has been 
approved by him, the executive branch of the Gov- 
ernment is estopped to deny thereafter the constitu- 
tionality of the act until the Supreme Court of the 
United States has declared it unconstitutional? 

Mr. M ANDERSON. That is my position. 

The Comptroller. Is that a correct" statement 
of your contention? 

Mr. Manderson. It is a concise statement of 
my position. 

The Comptroller. Supposing the act passed 
by the legislative branch did not meet with execu- 
tive approval, but did meet with a veto, and the 



^37 

legislature passed the act over the veto of the Presi- 
dent, what then? 

Mr. M ANDERSON. In my opinion that would not 
change the condition in the least. 

The Comptroller. There is no difference be- 
tween an act passed over the veto of the President 
and one passed with his approval? 

Mr. Manderson. No. What I said was that 
the approval by the President would, or should, in 
equity and good conscience, be an estoppel upon the 
executive department, and neither the President 
who signed the act, or his executive subalterns 
should nullify it. I think that when a law is a law, 
having been passed in the forms of the Constitution, 
whether it be by executive approval or by the pass- 
ing of the law over the veto, and is upon the statute 
books, it does not lie in the mouth of an executive 
officer to disobey it. But he is to execute it; he is 
to construe it; he is to expound it; he is to settle 
rights under it. He is not to tear it to tatters be- 
cause bethinks it is unconstitutional; that that high 
province is not his, but belongs to the judiciary. 
And when it is a federal official of high rank, like 
yourself, no dictum of an inferior court, divided 
upon the question, should control him, but he 
should demand that the Supreme Court of the United 
States be his warrant for refusing to a citizen his 
rights under the law. 

The Comptroller. Let me ask you with respect 
to an appropriation in fact unconstitutional and 
which has been passed by the legislature over the 
veto of the Executive; how can the question be 
decided in the courts so as to prevent the expendi- 
ture of the public money in a manner contrary to 
the Constitution? 

Mr. Manderson. There are ways of testing it. 

The Comptroller. What are thev? 



138 

Mr. M ANDERSON. I do not intend to arm any 
adversary of my constituents with the method. 

The Comptroller. You are quite wise there. 

Mr. Manderson. When I am retained on the 
other side — and I never yet have been on two sides 
of the same suit — I will give that information. 

The Comptroller. I have been unable to find 
out how it is to be done. 

Mr. Manderson. I think I know how it could 
be done. I think I could do it if necessity com- 
pelled. But I am not bound to give to my adversary 
— and I do not mean you by that — 

The Comptroller. I understand. 

Mr. Manderson. I am not bound to give my 
adversary, who may be in the corridor within the 
sound of my voice, the information that would lead 
him to bring a law suit against my constituents. I 
might by that get a retainer from my constituents, 
but I am not here for that. 

The Comptroller. Your argument goes to the 
full extent, that if, for instance, an act should be 
passed in the short session of Congress, after a presi- 
dential election at which the party that was in 
power, both in the legislative and executive branches, 
had been put out of power by the will of the people, 
it could not be annulled by the executive, although 
unconstitutional, until it had either been repealed by 
a subsequent Congress or in some form or other had 
reached the determination of the judicial department 
of the Government. 

Mr. Manderson. Exactly that; Isay no election 
in November in a presidential year repeals any 
statute. 

The Comptroller. Of course not. 

Mr. MandeRvSON. It nullifies no law. 

The Comptroller. I agree with that, also. 



1 39 

Mr. ManderSON. It may entirely chanj^e the 
political aspect of affairs. It may put down the 
party of protection and put up the party of free 
trade, but it repeals no protection laws; it nullifies 
none. 

The Comptroller. Of course it does not repeal 
the law. 

Mr. Manderson. The fact that the new execu- 
tive officials are not in accord with the law makes 
no difference. The Supreme Court or the ensuing 
Congress are the only authorities that can wipe a 
law from the statute books. 

The Comptroller. It is not a question of re- 
pealing the law; it is a question as to whether there 
is a law. 

Mr. Manderson. So far as the Executive is 
concerned, it is a law when it is passed by Congress. 
It is for the Supreme Court to say whether it is or is 
not a law under the Constitution. Until that great 
tribunal destroys it, it is binding upon every exec- 
utive officer. 



140 



ADDITIONAL ARGUMENT PRESENTED ON THE PROPO- 
SITION THAT THE COMPTROLLER OF THE TREAS- 
URY IS WITHOUT POWER TO PASS UPON THE 
BOUNTY CLAIMS FOR SUGAR PRODUCED UNDER 
THE ACT OF MARCH 2, 1 895. 

At the conclusion of the argument of Judge 
Semmes, Mr. Manderson suggested to the Comp- 
troller that, under the terms of the act of March 2, 
1895, the Comptroller had no power to act upon this 
account and that the only auditing, accounting and 
disbursing officers who can haYe any legal connection 
with the claims for bounty for sugar produced be- 
tween July I, 1894, and August 28, 1894, and for the 
balance of the fiscal year 1894, are the Secretary of' 
the Treasury and the Commissioner of Internal 
Revenue. 

I suggested this view of the matter in the opening 
argument and expected and hoped that my associates 
would elaborate it. The more study and thought I 
give the proposition the more am I convinced that 
the view stated above is the correct one and, on be- 
half of the Oxnard Beet Sugar Company, I will enter 
a motion with the Comptroller that he refer the ac- 
count in hands to the Secretary of the Treasury so 
that the head of the Treasury Department may, in 
connection with the Commissioner of Internal Reve- 
nue, perform the duties that so clearly devolve upon 
them under existing law. 

The legislative, executive and judicial appropri- 
ation bill, in which is contained the legislation 
known as the Dockery Act, which practically creates 
the officers of the Auditor for the Treasury Depart- 
ment and the Comptroller of the Treasury and 
prescribes their duties and grants their powers, was 
approved and became a law on July 31, 1894. It is 



141 

the last act upon that subject-matter and in it, and 
the laws passed prior thereto, can be found all the 
provisions of law relating either to their duties or 
powers. In my oral argument herewith printed and 
submitted I went into the consideration of this law 
in great detail and need not repeat it here. 

The law providing for the adjustment of the ac- 
counts or claims for bounty for sugar produced dur- 
ing the two periods named in the fiscal year ending 
July I, 1895, ^^^^ providing for the payment of the 
bounty was approved and became a law on March 

2, 1895. 

It is the later law and is complete within itself, 
covering every question incident to the preparation 
for accounting, the ascertainment of the amount 
due each claimant, the passing upon or approval of 
the claim and the disbursing or payment of the 
money to the bounty claimants. If this be so and if 
neither the Auditor of the Treasury Department or 
the Comptroller of the Treasury have duties assigned 
to them under this later and specific law, then this 
account is wrongfully in the hands of the Comp- 
troller and should be at once transmitted by him to 
the Secretary of the Treasury or the Commissioner 
of Internal Revenue. 

It is surely so and as the Act in express terms 
throws all power, all duty and all responsibility upon 
the Commissioner of Internal Revenue, who is 
clearly the natural oilficer to assume them, and grants 
to the Comptroller no power, requires from him no 
duty and imposes upon him no responsibility, he 
is without jurisdiction in this case and any act per- 
formed by him is purely ornamental, entirely gra- 
tuitous and utterly void. 

The Act of October i, 1890, known as the McKin- 
ley law (Statutes at Large, Vol. 26, p. 533), so far 



142 



as the sugar bounty is concerned, is nearly a^t^^m 
much like the law of March 2, 1895. Let us con- 
sider the first named law. 

The whole scheme of the original sugar bounty 
schedule of 1890 clearly indicates on its face, that 
the determination of the amounts due for sugar pro- 
duced was to be left to the Commissioner of Internal 
Revenue, upon the same theory that amounts due 
from distilleries go through that bureau. For in- 
stance, to be entitled to the bounty certain things 
were required of producers: 

1. The sugar producers must have filed, prior to 
July first, " notice of the place of production." 

2. "A general description of the machinery and 
methods to be employed " in production. 

3. An " estimate of the amount of sugar" that 
the producer would probably make. 

4. An application for a license and a bond, etc. 
All these things were to go to the Commissioner of 

Internal Revenue, who was the only person who 
could know whether these things had been done. 
All other persons would necessarily act (if they had 
any duty to perform) perfunctorily. Then the 
license emanated from the Commissioner of Internal 
Revenue. The rules and regulations came from him 
approved by the Secretary. Of none of these things 
could the Comptroller or the Auditor know, except 
as any ordinary citizen might conclude on seeing the 
papers signed by the Commissioner of Internal Rev- 
enue. 

The "supervision" and "inspection" of the 
sugar produced was a duty imposed on the Com- 
missioner of Internal Revenue. 

(See paragraphs 232-234, act of 1890, and Stat, at 
Laro^e, vol. 26, p. 925, regarding sugar inspectors.) 

Who was it that was to ascertain the material 



143 

(if not all the) facts which entitled the producers to 
the bounty, if it was not the Commissioner of Inter- 
nal Revenue? Upon whom, aside from the Secre- 
tary himself, was any duty imposed? What officer 
could ascertain: 

1. The amount of sugar made. 

2 . Whether made under the rules and regulations. 

3. The degree of saccharine strength on which 
the bounty depended. 

4. Whether the four essential statements under 
paragraph 232 had been filed and a license issued 
under 233? 

In the very nature of things, this whole duty hav- 
ing been cast on the Commissioner of Internal 
Revenue, he^ and he alone, was the only person who 
could pass upon the questions involved. 

This is in perfect accord with paragraph 235 
which read as follows: 

"And for the payment of these bounties the Secre- 
tary of the Treasury is authorized to draw warrants 
on the Treasurer of the United States for such sums 
as shall be necessary, which sums shall be cerlifiedto 
him by the Comrnissioner of Internal Revenue^ by 
WHOM the bounties shall be disbursed * * *." 

From this it very clearly appears that here was a 
special act, the operation and provisions of which 
made it clearly unnecessary for any person except 
the persons mentioned in the law, to have any power 
or control over the matter, since no one — except the 
Commissioner of Internal Revenue, under the theory 
and framework of the law, could possibly know the 
facts. There is not a word said about any Auditor 
nor Comptroller! 

In fact they are excluded by the words in para- 
graph 235, which authorize the Secretary to draw 
warrants for such sums as shall be certified to him 



144 

by the Commissioner of Internal Revenue. Where in 
that statute is there any power for any Auditor or 
Comptroller to interfere? It would be an usurpation 
of the power of the only person on whom was cast 
the duty of certifying the amounts. 

It is no answer whatever to say that the Commis- 
sioner of Internal Revenue did not or may not have 
asserted his power or authority. It does not pre- 
clude either him nor claimants from insisting on the 
law because of some unwarranted precedents set in 
the settlement of the bounty claims in the past. The 
fact that the bounties due under the McKinley law 
were paid, was suflfiicient for the purposes of the 
claimants and they would not be likely to complain 
of the manner that the conclusion was reached. 

So much for the act of 1890. Turning to the act 
of March 3, 1895, we find that Congress left this 
matter still more emphatically with the Commis- 
sioner of Internal Revenue. (28 Stat, at Large, pp. 

933-934.) 

"The bounty herein authorized to be paid shall be 

paid upon the presentation of such proof of manu- 
facture and production as shall be required in each 
case by the Commissioner of Internal Revenue, with 
the approval of the Secretary of the Treasury, and 
under such rules and regulations as shall be pre- 
scribed by the Commissioner of Internal Revenue 
with the approval of the Secretary of the Treasury. 
And for the payment of such bounty the Secretay of 
the Treasury is authorized to draw warrants on the 
Treasurer of the United States for sums as shall be 
necessary, tvhich sums shall be certified to him by the 
Commissioner of Internal Revenue^ by whom the 
bounty shall be disbursed. * * *" 

This is the exact language used in the act of 1890, 
except that the word *'such" seems to have been 



M5 

omitted in the act of 1895, and the word "bounty'' 
in the act of 1895 is phiral in the act of 1890. 

The whole matter was left by act of 1890, to the 
Commissioner of Internal Revenue, and this theory 
was followed in the act of 1895 — which contains 
this provision — "For examination of claims and 
ascertai)iing the amoiuit diie^ and the prevention of 
fraudulent claims for said bounty, the Commissioner 
of Internal Revenue is hereby authorized to employ 
two Internal Revenue agents, in addition to those 
already provided for, etc." 

This clearly makes the Commissioner of Internal 
Revenue X\\^ final adjuster. He, and he only, ascer- 
tains the amounts and prevents fraudulent claims. 
In the very nature of things this must be so under 
til is special act. 

Power to "ascertain the amount due" in these 
claims, peculiar in their nature, falling entirely 
within the control of the Internal Revenue Bureau, 
excludes the interposition of any other officer and 
makes the Commissioner of Internal Revenue the 
adjuster, whose finding is evidently y^;?^/ and conchc- 
sive on the Government, as that of the Auditor and 
Comptroller is in some other cases. 

It may or may not be that the Comptroller event- 
ually "countersigns" the warrants after \.\\^ Secre- 
tary of the Treasury has signed them, but that 
would be a mere perfunctory act to indicate genuine- 
ness of signature, etc. It would give the Comp- 
troller no power whatever over the Secretary's war- 
rants. The countersignature of warrants is an act 
so purely perfunctory that under the terms of the 
Dockery Act the Assistant Comptroller, and even the 
chief clerk has the power to countersign warrants. 
Could anything show more clearly the mere minis- 
terial character of that duty? 
10 



146 

It may well be that the Commissioner of Internal 
Revenue may certify a total in bulk and so draw by 
way of requisition. In any event it is quite evident 
that it was the intent of Congress to give the whole 
finding and certifying power to the Commissioner of 
Internal Revenue, and that it is clearly expressed. 
The Comptroller can take no power by implication 
and certainly can have no desire to take upon him- 
self duties clearly devolving upon others. 

It is no answer to say that the act of July 31, 
1894, provides that the "Auditor for the Treasury 
Department shall examine all accounts relating 
to the * * internal revenue * * 

and to all other business within the jurisdiction of 
the Department of the Treasury." This would be 
authorization to him perhaps to examine the ac- 
counts of the Commissioners of Internal Revenue in 
the matter of his receipts and expenditures and might 
apply to these bounty accounts if it were not for the 
fact that the later law of March 2, 1895, which 
must control, so carefully provides for all the 
detail of accounting and payment. 



147 

Mem. 

In a letter from the Secretary of State Gresham to 
the President of the United States, dated October 
12, 1894, in regard to the protest of the German 
cml)assador against the imposition by the Wilson 
tariff bill of an additional one-tenth of a cent a pound 
duty on sugars imported from countries that paid a 
greater bounty on the exportation of refined sugar 
than was paid on raw sugar, Secretary Gresham 
said: 

"The payment by a country of a bounty on the 
exportation of an article of its produce or manufac- 
ture for the purpose of encouraging a domestic in- 
dustry, can no more be considered as a discrimina- 
tion than can the imposition of a protective, or 
practically prohibitive duty on the importation of 
an article, the produce or manufacture of a foreign 
country for the same purpose be so considered. 
The two measures are the same in principle, the 
question as to which shall be adopted is a matter of 
domestic policy. It is a matter in respect to which 
nations, in stipulating for equality of treatment, 
have preserved liberty of action. The protective 
duty on importation and the bounty on exportation 
are alike intended, whatever may be their effect, to 
create a material advantage in production or in 
manufacture. As between the two the bounty is 
the more favorable to inhabitants of foreign countries, 
since it tends to enable them to get cheaper articles 
at the expense of the bounty-paying government." 

Secretary Gresham then refers to the bounty on 
exported pickled fish, to which reference has been 
made in this argument. 

"Formerly, the Government of the United States 
paid a bounty on all exported pickled fish that 
were derived from the fisheries of the United States. 
(Sec. 2, Act of July 29, 1813, Statutes at Large, 
Vol. 3, p. 50.) This act was continued in force in 



148 

iSi6, its duration having originally been limited to 
the period, whatever it might be, covered by the war 
with Great Britain and a year thereafter. ( Act of Feb- 
ruary 9, 1816, Statutes at Large, \^ol. 3, p. 254.) 
It remained in force for many years, it seems still 
to have been in force in 1845." 



CONSUMPTION OF SUGAR IN UNITED STATES. 

1890 l,522,C0O tone. 

1891 1,872,000 tons. 

1892 1,853,000 tons. 

1893 1,891,911 tons. 

or in i^. .., x.a pouiius ^,_;^v6,000,000 

of which we imported 3,651,000,000 

and produced G45,0u0,000 

PRODUCTION Ol'' CANE SUGAR IN UNITED STATES. 

1888-9 287,000,000 pounds. 

1890-1 483,010,000 pounds. 

1892-3 about 600,000,100 pounds. 



THE SUGAR CROP OF THE WORLD. 

It is interesting to note the sugar crop of the world 
and see how the production of beet sugar exceeds 
that from cane. 

The cane crop of 1 893-' 94 is made up as follows: 

Whence it comes Tons 

Cuba 900,000 

Porto Rico 60,000 

Trinidad 50,000 

Barbados 65,000 

Martinique 32.000 

Guadaloupe 50.000 

Demarara 110,000 

Brazil 225,000 

Java 180,000 

Philippine Islands 250,000 

Mauritius 125,000 

Reunion 37,000 

Jamaica 20,000 

Minor Antilles 25,000 

Louisiana 265,000 

Peru 65,000 

Egypt 70,000 

Sandwich Islands 135,000 

Total 2,960,000 



149 



The beet crop was made up as follows: 

U hence it comes 

Brought forward ^ 

Germany 1 ,300,000 

Austria 825,000 

France 575,000 

Russia 650.000 

Belgium 225,000 

Holland 75,000 

Other countries 120,000 



Tons 
2,960,000 



Total 

Total of cane and beet 

For the last five years it has been: 

SUGAR CROP OF THE WORLD. 



3,770,000 
6,730,000 



YEARS 


Beet Sugar 


Cane Sugar 


Total 


1893-'94 

1892-'93 

1891-'92 

1890-91 


Metric tons. 
3,841,000 
3,428,515 
3,501,920 
3,710,895 
3,633,630 


Metric tons. 
2,960,000 
2,645,963 
2,852,296 
2,554,536 

- 2,069,464 


Metric tons. 
6,801,000 
6,074,478 
6,354,216 
6,265,431 


1889-'90 


5,703,094 



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